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Savage & Ors v Muir & Ors S35/1998 [ 1999] HCATrans 196  (18 June 1999)

Sydney No S35 of 1998

B e t w e e n -

LESLIE HERBERT SAVAGE, BELMONT COLLIERY PTY LTD, CARRINGTON HOLDINGS PTY LTD, CARDIFF COAL COMPANY and TUDOR LAND PTY LTD

Applicants

and

EDWARD LUNN, ELSIE MUIR, WILLIAM JOHN LUNN, JAMES ALFRED LUNN, CECILEEN JONES, NEVILLE HIDLEY, HAROLD LUNN, KEVIN JAMES LUNN, ALAN HICKS and THE PUBLIC TRUSTEE

Respondents

Application for special leave to appeal

KIRBY J

HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 18 JUNE 1999, AT 2.00 PM

Copyright in the High Court of Australia

MR B.W. WALKER, SC: May it please the Court, I appear with my learned friend, MR A.A. HENSKENS, for the applicants. (instructed by Baker Love)

MR F.S. McALARY, QC: I appear for the respondents with my learned friend, MR G.E. UNDERWOOD. (instructed by The Hafey Law Practice)

KIRBY J: Yes, Mr Walker.

MR WALKER: Your Honours, this is a case where there were errors at trial detected and described as such by the Court of Appeal which then proceeded to make an error of considerable proportion which prevented the justice being done upon appeal which the kind of error committed by the trial judge rendered, in our submission, the only appropriate correction. The error made below was of a kind which attracts in this case, we submit, the special consideration to the individual merits of the case, the claim to justice of the particular litigants; but it also involves a matter of general public importance for the administration of justice which arises as follows. For reasons which met with no approval from the Court of Appeal, the trial judge divided the task of considering the evidence and the argument and the delivery of reasons into two. They are known as the 1994 judgment or reasons and the 1996 judgment or reasons.

HAYNE J: At the time of the 1994 reasons, had the parties closed their cases to evidence?

MR WALKER: Yes, your Honour.

HAYNE J: Had the parties made submissions as to the findings that should be made?

MR WALKER: Yes, your Honour.

HAYNE J: What element of prejudgment is constituted by a judge publishing tentative findings at that point?

MR WALKER: If the tentative findings precede only the making of orders or further invited argument which treat the findings as final and as the basis for the further argument, none at all, your Honour.

HAYNE J: Assume the findings are expressed to be tentative, "absent further argument I am minded to consider finding X". What element of prejudgment or bias or apprehended bias is constituted by that process?

MR WALKER: At that point, if there is no question of credit involved upon which further submissions are invited as to matters of fact depending upon credit, none, and that is not our case.

HAYNE J: Why does the introduction of the element of credit matter? "I am minded to disbelieve witness X for reasons A to Z", what do you have to say as to that?

MR WALKER: There is no more objection to comments of that kind in what might be called a staged or delayed fashion than there would be during final address, were a trial judge to say to counsel, "I have to tell you I was not impressed by the way such-and-such a witness dealt with such-and-such a suggestion". And again, our case does not identify that or place any focus on those circumstances as the reasons why there ought to be a grant of special leave in this case.

The reason why there ought to be a grant of special leave in this case is that after the 1994 delivery of so-called reasons which involved those things which were said to be tentative in the way criticised by the Court of Appeal, there was then considerable further forensic activity. It resulted eventually in the 1996 reasons. In between, the following matters may be noticed as making the case a suitable vehicle to consider this question: whether there is a doctrine of curate's egg involved in matters of denial of natural justice or ostensible bias. Can the appellate court before whom those complaints are made pick and choose and salvage something of the adjudicative process so as to render a decision at the appellate level, as it were, which was never the decisions rendered below. To pick that - - -

HAYNE J: You should not, for your purposes, assume that I am yet persuaded that the premise of this argument is established.

MR WALKER: Yes.

HAYNE J: For me at the moment, the killing ground of the case on this aspect of it lies in the premise, not the consequences that might then flow.

MR WALKER: May I then go to the events that intervened between 1994 and 1996 which transformed this case from a case of what might be called robust inquiry or expression of preliminary view, about which we would have no complaint, to a case where there was a denial of natural justice and an apprehension of ostensible bias correctly detected and described as such by the Court of Appeal which rendered the 1996 judgment one which could not be supported - their conclusion. In the application book, 187, at the foot of that page, their Honours in the Court of Appeal quote from the reasons in the 1994 set of reasons which was the set up by the judge of the circumstances in which there came then to be an application to amend by the plaintiffs to raise an allegation of criminal conduct, namely fraudulent fabrication of documents against somebody in relation to whom for ethical reasons my learned friend had previously cleaved to the forensic path of making no such allegation. At the foot of that page, there is a reference by his Honour in these 1994 reasons which resulted in no orders nor in the recording of any interlocutory answer to any question, where there is a reference to Mr Savage in these terms:

Providing Mr Savage is entirely free of any involvement in any forgery -

and then he expresses some logic about laches which, although the Court of Appeal disagreed with it as a matter of logic and on the facts, was the way in which his Honour then set the course for the rest of this trial. If he was not involved at all, then there will be success for the laches defence, and that was decisive in the case. If he was involved, then naturally, it being an equitable doctrine, there is little doubt that it must be rejected as a defence.

That being the way in which his Honour expressed himself, it is of course critical to note that in the Court of Appeal it was held and held correctly that his Honour should never have expressed and raised questions about that issue where the pleadings had deliberately refrained from making any allegation of forgery against Mr Savage, and where the case had not been conducted on the basis that it was even proper to suggest it to him in cross-examination. Again the Court of Appeal, with respect, correctly upheld the complaint on behalf of my clients in relation to that procedure below.

In due course, as your Honours know from the materials, there was an application made for leave to amend which was granted conditionally. That was a leave to amend to add these grave allegations. These are not allegations just of forgery. Forgery by someone at some time - be it Mr Allen of Allen Allen & Hemsley or be it Mr Savage, my client - had been in the air, though never against my client in a way which made it a justiciable point. They had been in the air. They now crystallised after this expression of tentative view in a way which, in our submission, made it impossible thereafter, on the critical issue of forgery and on the critical issue of forgery in which Mr Savage was involved, crystallised in a way that made it impossible for the reasonable bystander to regard his Honour as bringing to that the appropriate judicial mind. He had expressed views which included views as to the credit of Mr Savage on an issue that Mr Savage had never had to meet, had not even been cross-examined on the point. There it is that distinguishes this case from the ordinary case. All the evidence is in, all the issues are litigated, all the arguments are had and counsel is confronted in that final act, that final act, with the judge's suggestion of difficulties about credit and the like.

There is an immense distinction when then, for the first time, the judge recognising the issue is not properly before him and thus requiring an amendment, for the first time an allegation of crime upon which it is clear the fate of the case is going to depend, is levelled against a party. That was why the case correctly attracted from the Court of Appeal the conclusion that the 1996 judgment could not stand. It was affected by what they call irregularities. Those irregularities partake both of the nature of a denial of natural justice, that is, someone had their case decided partly by a judge who never had the issue properly before him, and also see their references to the Spedley decision in the Court of Appeal in New South Wales because there had been an earlier stage at which findings of credit were made in relation to somebody whose conduct was then again going to be the subject of then fresh allegations, fresh because the amendment had to be made.

KIRBY J: Is the suggestion that this Court would intervene in this matter because of some error of principle or misapplication of principle, or is it on the grounds that it is an injustice to your client that should attract our attention, or both?

MR WALKER: It is both, your Honour. First, the plight in which my clients are placed is that what has occurred obviously has never been the subject of appellate scrutiny for the reasons I am about to develop. Our complaint is about what the Court of Appeal did. The Court of Appeal upheld our complaint, in large part, against the trial judge and we support the Court of Appeal reasoning and conclusion practically all the way. It is, of course, a case of individual denial of justice, the individual merits of our application urge in favour of the application being granted, your Honours, because of the grave seriousness of this kind of allegation being made irregularly as their Honours held, it being a decisive matter, and as your Honours have read, it being in the course of an extraordinary saga reaching back into last century, involving transfers in 1916, Mr Allen's conduct between 1910 and 1938, the archives of the Mitchell Library with Mr Allen's private diaries, and then the 1970s, and thereafter.

HAYNE J: But your complaint focuses and focuses only on contentions about bias, not about determination of issues not squarely raised by pleadings going beyond the pleadings of the kind. It is the bias which is asserted, is it not, ostensible bias?

MR WALKER: It is asserted. It has to be seen in the circumstances which the Court of Appeal place it in, namely the expression of a view on an issue not before his Honour preceding and leading up to an application by which that was added by his Honour. Now, I had - - -

HAYNE J: But the amendment did not proceed.

MR WALKER: I had not completed the narrative, as your Honours know, after his Honour had granted the leave to raise this allegation, leave to appeal from that interlocutory procedural decision was granted by the Court of Appeal and, perhaps not surprisingly, the matter was compromised with the amendment being withdrawn. But it gets worse, with respect, because then what happened was that his Honour held that the onus of making a laches defence lying on the defendant unremarkably, it also included with it an onus of negativing personal involvement in crime or fraud.

HAYNE J: But I see nothing of that in your proposed grounds. Your grounds focus only on bias, do they not?

KIRBY J: It is 246.

MR WALKER: Yes they do. They do. It may be that the grounds need further delineation, your Honour, but in reality the focus remains on the bias in this sense: that by reason of the bias, the reasons which were the foundation for the only set of orders made - and we complain as the Court of Appeal themselves said against us, against orders not reasons - the reasons were flawed and could not be used as the basis for the orders. That is where we move to the second leg of our argument for leave, again focusing on bias, where we say general matters of special importance to the administration of justice, and of high importance to the administration of justice, are raised which are not squarely covered if they have even been adverted to at all by any authorities of this Court or by any authorities in England which have been incorporated in the well-known reasons in this Court.

KIRBY J: You are coming now to the communication with the Director of Public Prosecutions?

MR WALKER: No, I am leaving that aside, your Honour. That is - - -

KIRBY J: Please leave enough time to deal with that because that was a matter on which I need your help.

MR WALKER: Yes. I am now still concentrating on the question of bias which, as your Honour Justice Hayne has pointed out, is where we have taken our stand. If, as the Court of Appeal said, the approach taken by the combination of the 1994 and 1996 by the trial judge could not be maintained, could not be justified and gave rise to the ostensible bias of the Spedley kind that their Honours referred to, as well as resulting from a thorough going denial of natural justice at the earlier stage, then it followed, in our submission, that the only choice, the only question confronting their Honours was: by reason of the irregularity of the discretely staged 1994-1996 process, can something be salvaged of what his Honour had concluded on the evidence, after hearing argument at an earlier stage in the case, whereby the usual result - we would say the invariable result - of a case vitiated by ostensible bias or denial of natural justice being sent back to be reheard could be avoided.

HAYNE J: For my own part, I do not think I need much persuasion of the force of that limb of the argument, Mr Walker. I speak only for myself.

MR WALKER: That is the matter that makes it, we say, special. It lifts it out of the category of a complaint which looks to the individual merits of our grievance and says, "But they were ordinary principles which were breached". We are, of course, complaining about the breach we say, in an egregious way of ordinary principles well established, but there is something special here. The way the Court of Appeal then proceeded was to say, as we say, curate's egg fashion, "There are things that can be salvaged". Now the things that can be salvaged, your Honours, as you are aware from the papers, include and include critically the matter of forgery by whomever one puts aside at the moment; and they disagreed with his Honour's approach that that could in any way give rise to a laches defence.

Of course, questions of forgery, that is, was there a forgery, in a case where the handwriting expert called by my learned friends was cross-examined by my predecessor in brief for, I am told, three days are integrally related or, one would have thought, could be before a trial judge integrally related to who was the forger. Was it 1938 and a solicitor? Was it later and an entrepreneur, for example? Now, those are matters which, in our submission, cannot be the subject of appellate delving back into the reasons of a trial judge tentative on critical matters, namely when did it happen, by whom did it happen, to rescue something from what in our submission remains the sorry spectacle of a case affected as they had publicly held by denial of natural justice of a most important kind - allegations of crime in civil proceedings - and by an apprehension of bias.

That brings us then to one more extraordinary circumstance in an extraordinary case, as their Honours described it below. That is the communications with the judge between 1994 and 1996 with the law enforcement authorities which raised and raised squarely the allegation crystallising in a charge - proceedings later being withdrawn - against Mr Savage involving the very crime which had been the subject of the abortive amendment by the plaintiffs in relation to the laches defence which his Honour had held would critically depend upon whether Mr Savage was guilty of that crime or not.

KIRBY J: And not immediately drawn to the notice of the parties.

MR WALKER: Not immediately drawn to the notice of the parties.

KIRBY J: You had better tell us exactly.

HAYNE J: Is that right? When is the first communication? Is there one pre the events recorded at 89 and following of the application book? You spoke of a communication in 1994. I am not - - -

MR WALKER: It is between the 1994 reasons and the 1996 reasons, your Honour.

HAYNE J: Yes, the first communication I identified was at application book 89 concerning a communication on 21 February 1995 which is at once handed to the parties.

MR WALKER: Yes.

HAYNE J: The next communication I identify, and I need assistance on this, Mr Walker - - -

MR WALKER: Yes.

HAYNE J: - - - is there are communications between December 1995, see file note, appeal book 95.

MR WALKER: Yes, your Honour.

HAYNE J: Letter, appeal book 96, 97, 98, 99, letter 100, drawn to the attention - sorry, another one at 102, drawn to the attention of the parties, I thought, at 105 on 14 May 1996. So between December 1995 and May 1996 there are those communications.

MR WALKER: Yes, your Honour. That is right.

HAYNE J: Is there any other step in the sequence that I have omitted?

MR WALKER: No, your Honour, no.

HAYNE J: Then what is the complaint? Late notification; insufficient notification; fact of communication? Where lies the complaint?

MR WALKER: The complaint lies in, first, late notification - it is hard to say insufficient in the sense that finally full details are disclosed.

HAYNE J: But February 1995, the whole lot goes, does it not?

MR WALKER: The whole lot that then existed, your Honour, yes.

HAYNE J: So February 1995 there is a communication instantly passed on.

MR WALKER: The file note passed on, yes, your Honour.

HAYNE J: Yes. Where is the delay to which you are referring.

MR WALKER: The delay is only in the dates that your Honour has already referred to. The judge did not just get inquiries from the February 95 ones to which you have referred. The judge also got inquiries from the prosecuting authorities.

HAYNE J: Yes.

MR WALKER: I do not wish your Honours to misunderstand. These, we say, are irregularities for the reasons which were unsuccessful before their Honours in the Court of Appeal on the reopened argument before the Court of Appeal, but they are not integral to the complaint to which I have devoted most of my attention this afternoon. These are, in our submission, an extra reason why there are grounds for the reasonable bystander to fear or to suspect that his Honour would not be bringing a mind to the important question, as he saw it, of the laches defence which in turn necessarily involved a forgery finding unaffected by extraneous material.

KIRBY J: Yes.

HAYNE J: Mr Walker, although the red light is on, I am most anxious to understand this aspect of the case, because it is an aspect which I say frankly to you troubled me at first reading, but some of those troubles receded when I tried to sketch out the chronology.

MR WALKER: Yes.

HAYNE J: Now, you speak of it as an irregularity, I understand that, but what is the irregularity? What is it that the judge should have done that he did not? He cannot stop people writing to him, for a start.

MR WALKER: No.

HAYNE J: What is it he should have done, but did not?

MR WALKER: We do not say that there is error that required appellate interference because he was (a) written to, or (b) opened his mail. We do not say that. We do say that the whole material of this kind ought to be given to, exposed to all parties simultaneously, immediately, particularly when, in effect, his Honour is being asked to lend his Honour's imprimatur, to lend his Honour's assistance to the collection of material from material under his Honour's authority, that is, being used by his Honour for his Honour's fact finding for an investigation by law enforcement authorities who obviously had made investigative decisions and preliminary decisions in exactly the same direction as that which his Honour must have been minded to do, bearing in mind his final reasons, in relation to forgery.

HAYNE J: But the judge, on 14 May, releases the correspondence of 9 April and later.

MR WALKER: Yes.

HAYNE J: Are we to measure this in days, not matters of five weeks?

MR WALKER: Not coffee spoons, no, but that is not a coffee spoon.

KIRBY J: But what is its relevance?

MR WALKER: Its relevance, your Honour, is that it adds - its only relevance is - - -

KIRBY J: In the sequence of events leading to the judge's decision that he would take.

MR WALKER: It is only a circumstance eventually known to the parties, that is, it is part, eventually, of the public process which - - -

KIRBY J: This is top-up, really, for your primary argument.

MR WALKER: Yes.

KIRBY J: You say it is all part of the irregularity of the conduct of the trial.

MR WALKER: Yes.

KIRBY J: Standing alone it might not attract special leave, but added to the earlier submission, you say it is enough.

MR WALKER: We go even further against ourselves, we would not even say it was decisive. But it is part of the story, and it is an extraordinary story and it would be clearly wrong of us not to draw it to attention.

KIRBY J: It is an extraordinary story, but one would not wish to establish a principle that would prevent judges sitting alone from taking cases in stages. It is a sensible, practical and often economical thing for judges to do.

MR WALKER: Yes, but, of course, the danger of taking things in stages is that one comes to express conclusions on important matters where the public pronouncement of, in effect, moral judgments - necessarily moral judgments - might be undertaken on incomplete material; and that, for well-established and understood reasons, is to be frowned on.

HAYNE J: But it is not so long ago that I was counsel that I have forgotten how deadly the silent judge can be, the judge who will not tell you what he or she is thinking.

MR WALKER: None of our complaints is about the silent judge.

KIRBY J: I have been trying that out myself in this case.

MR WALKER: And I have found it particularly uncomfortable, your Honour.

HAYNE J: With or without success?

MR WALKER: I think I have said all I can, nonetheless, in answer to your Honours.

KIRBY J: Yes. Yes, Mr McAlary.

MR McALARY: Your Honours, in anticipation that you would need a clearer understanding of the sequence of events, I have sought to prepare two chronologies, because we are dealing with two quite separate periods.

KIRBY J: Yes.

MR McALARY: We are dealing with the period when the judge was communicating with the DPP. We, that is the plaintiffs, were in no way involved in that in any way. The other period arises when the judge makes his first judgment. When that judgment came out, he put it out on the basis that he would give the parties the opportunity to consider it and I will hand to your Honour a chronology - I have given these to my friend, of course- of what occurred then.

Now, the first step was that I was faced with a dilemma because I believed I was entitled to succeed on the findings made, as I subsequently did in the Court of Appeal, but also did not appear that the judge would find for me that way, and it did appear that maybe if I opened the issue of fraud, then I might succeed. I applied for an amendment to the statement of claim. That was opposed by my learned friend, Mr Callinan. He argued - and this is important - that if the amendment was allowed the judge must disqualify himself. It was a kind of argument in terrorem: do not allow it because you will have to disqualify yourself. It was allowed. There was an appeal against the interlocutory order allowing it. Since there was a penalty of $100,000 attached to it, because we had to provide $100,000 by way of security for costs to the other side, it appeared ultimately to us that we could not conduct a second trial and that amendment was no longer sought by my side.

Now, it is perhaps slightly complicating it, but I will add this. At the time when I applied for the amendment and obtained it from the trial judge, everyone thought that he had also allowed me to amend the reply. Subsequently in proceedings before him, he indicated that had not been his intention and there were proceedings brought under the "slip" rule by my learned friends and under the slip rule, the amendment which had apparently been allowed to the reply was discontinued. If you look at what I have written here, you will see that in number 5 the Court of Appeal gives leave to appeal against interlocutory order. On 19 May their application to re-amend the reply under the slip rule was successful. So the reply remained in identical terms. On 23 May there was an application to amend statement of claim to plead fraud was withdrawn.

Now, the important thing, your Honours, is this. If you would turn now to the letter which is attached. It is a letter from the solicitors for the respondents, for the present applicants, for the defendants in the case, dated 26 May. Your Honour Justice Kirby, I think it is the first attachment.

KIRBY J: Yes, I have it.

MR McALARY: You have it?

KIRBY J: Yes.

MR McALARY: Well, if you look at it, you will see what the position is said to be. That is, as there is no amendment to the reply and no amendment to the statement of claim, there is then no issue concerning bias. Can I read the parts:

In respect of the Appeal, we note the following:

1. On 19 May 1995 His Honour amended his order of 16 December 1994 under the slip rule to delete any leave to amend the Reply;

2. You have indicated that you will not file a Statement of Claim alleging fraud against Mr Savage;

3. Bias is alleged in the Appeal only in so far as it relates to his Honour Mr Justice Hulme hearing further evidence in relation to pleadings amended from those which are current at the conclusion of the Trial in February 1994. As at 24 May 1995 there will be no pleadings in the matter which differ from those current at the conclusion of the Trial in February 1994.

This is followed, if you turn to the next document, by a notice of motion by the defendants to obtain judgment on the basis of the first judgment and that notice of motion came before the trial judge on 2 June. It was ultimately adjourned to 30 June when it was argued. If you look at the chronology you will see on the bottom of the first page the reference to the letter from defendants' solicitor. Turn over the page you will see the notice of Motion seeking verdict and dismissal of plaintiffs' action, which I have just referred you to.

GUMMOW J: Yes.

MR McALARY: On the 14th I made yet another attempt to amend the reply. That was set down for hearing on the 30th. On 30th the Court dismissed the motion to amend the reply. They moved for judgment in the action on their notice of motion. We moved for judgment in the action on the basis that we had succeeded in the first judgment. The judge reserved.

Now, with all respect, your Honour, what that means is that at that time the parties had expressly or implicitly agreed that they would both seek judgment or their rights under the first judgment as given by his Honour, that these issues about bias which have been raised by way of in terrorem by Mr Callinan when I was seeking to obtain an amendment to the reply and to the statement of claim had vanished. They wanted judgment and they moved for it. If you turn to the last - - -

KIRBY J: Could the fact of their intervention in the meantime, notwithstanding, raise in the mind of an impartial observer concern that these issues had been going through his Honour's mind and might contaminate his approach to the matter?

MR McALARY: We would say, with respect, not. What the judge was doing was hearing applications being made to him. They were making applications. We were making applications. There was no basis upon which anyone could say that he was biased in any way. If you look at the material that I raised in the application form, you will see that he made a large number of findings in favour of the defendants.

Although the amendment had been allowed to the statement of claim and although a written final form of amended order had been placed before the Court, signed by both counsel, the junior counsel on either side, to amend the reply, he indicated that that was not his intention and, when I simply could not just change it, he gave them leave to move under the slip rule. He heard an application under the slip rule and I failed because he said it was not his intention.

When I subsequently applied to amend the reply, I again failed and that I had attached to my right to amend the statement of claim an obligation to provide a payment of $100,000 by way of security of costs so there is nothing in the treatment of the plaintiffs during that period of time from which one could conclude that he was in any way favouring them and, indeed, in the end, we say, with respect, the critical matter is that when this had itself worked out to the letter, Messrs Baker Love, both parties were prepared to proceed with the further hearing before the judge, both chancing our positions. I thought I could succeed on the basis of laches - the onus was on them and they had not established it. Mr Callinan thought he could succeed on another bases.

HAYNE J: Can I leave aside from consideration for the moment the argument you make about agreement about how the case would go forward.

MR McALARY: Yes, your Honour.

HAYNE J: Leave that out of account. Either these issues were sufficiently raised by the pleadings to warrant the tentative findings first made or they were not. If they were not sufficiently raised, an amendment was required.

MR McALARY: Yes.

HAYNE J: Amendment was sought. It all fell over for the reasons you have explained, but the case then went forward on the original pleadings.

MR McALARY: Yes, and on the original evidence.

HAYNE J: Yes. Either the issue found against Mr Savage was sufficiently raised on those pleadings or it was not. If it was not, then there is ground for appellate intervention on that basis, but if no intervention is founded on the basis "issue not sufficiently raised", how does the question of bias intrude?

MR McALARY: Well, the question of bias intruded - sorry, it arose because the trial judge had a view about the defence of laches. That is where it came from, and because he concluded wrongfully that he had to decide this question of laches by reference to the time when the forgery took place, he was forced wrongly to reach conclusions about who the forger was. In that sense, the issue about who the forger was totally irrelevant. I had brought a case of forgery; I had never brought a case of fraud. So I established my case by proving that the documents were forged.

There was an inference that they were done - having regard to the great complexity of the matter, it was an inescapable inference that someone had done this with a view to some improper or illegal cheating situation. There was no doubt you could not do such a huge forgery without having some improper purpose to it, so I had no problem once I could establish forgery. I established forgery. The problem that I ran into was that in the numerous issues that were pleaded, laches was pleaded by my friend, I think, by some amendment, and that became a problem because I could not convince the trial judge that to establish laches they had to show when we became aware, and I - - -

HAYNE J: But the bias asserted is an appearance of prejudging an issue in the case. Either the forgery is an issue or not and there is debate between the parties about that.

MR McALARY: There was.

HAYNE J: But does the publication of tentative findings, on one view of the thing, by hypothesis is seen as an issue in the case constitute bias?

MR McALARY: No, it does not, your Honour, because this: what that does at the most is establish that the trial judge was wrong in the line of reasoning that he was following, but it establishes nothing in relation to bias. All that it does establish is that the trial judge - and you can see it if you go through the judgment - he was arguing that to deal with this question of laches - - -

HAYNE J: You had to know when, and if you knew when you knew who.

MR McALARY: Yes. Who, that is right. I was facing that problem, rather than simply rely on appeal. Now, your Honour, may I just say this, in addition. If you look at that first chronology that I gave you, you will see that by the time we came to argue it, you will find attached to that chronology the transcript of the last day of the argument. I was forced on somewhat unready to deal with it, but I managed to establish something that had previously not been recognised which was where the onus was, and that had a significant effect because Mr Gyles, Justice as he now is, he had only stood up and simply asked for a judgment without arguing a word. He just stood up - - -

KIRBY J: You are not unused to this drama, Mr McAlary, you have been guilty of it sometimes yourself.

MR McALARY: It is worthwhile retelling, your Honour. I had been trying to get an adjournment.

HAYNE J: The 20 minutes is running, Mr McAlary.

MR McALARY: I do not mind that. Let me give you the other chronology then. I thought that might have been interesting, but if it is not.

HAYNE J: I am sure it is.

MR McALARY: It is at least amusing. The other one, your Honour, I attempted to deal with what I trust your Honour Justice Hayne is interested in, and these are the matters that occurred between the law enforcement authorities and the judge. Now the first one, it is right at the top of that, your Honour, is an occasion when there was a notice of motion filed by the police. It came before his Honour and he referred it to Mr Justice Young who allowed access. That is the one of 21 February, I think, your Honours.

KIRBY J: Yes.

MR McALARY: Then after that there was a phone call in December of 1995 when the DPP rang the judge to ask that exhibits be not released. That is the only other matter that your Honour Justice Hayne has not identified. I should bring it to your attention.

On 17 May his Honour re-listed the matter on short notice for the purposes of dealing with the request by the DPP to gain access to exhibits for use in the committal proceedings, and your Honour knows the balance of that. May I just remind your Honours that this is not a case where it is claimed that the judge had any interest in the matter. The bias claim does not arise out of interest, to bias of interest.

In Reg v Australian Stevedoring Industry 88 CLR at 116 dealing with the fact that a member of the Stevedoring Industry Tribunal had spoken to some reporters about anticipated litigation, the Court consisting of the former Chief Justice Dixon, and Justices Williams, Webb and Fullagar said:

But when bias of this kind is in question, as distinguished 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.

Now, this is not a case of bias through interest. The only matters alleged against the trial judge by way of bias in relation to these communications is that he replied to them and that he did not immediately place them before the parties. When the question of access first came up he directed that it be done by notice of motion and it was done by notice of motion. Mr Justice Young dealt with it, he allowed access. That was to the police. The next time a question of access came up, it was for the DPP. He did not follow the same procedure but allowed access. But when the question of obtaining exhibits for use came up, he notified the parties. We submit, your Honour, that no reasonable minded observer would find bias in those circumstances.

KIRBY J: Yes, Mr Walker, anything in reply?

MR WALKER: Your Honours, it is said that allegations of bias raised in terrorem by my predecessors in brief vanished. They did not vanish. They suffered the fate of such allegations whether raised in terrorem or not, namely they were the subject of an application which was rejected and there were two, relevantly, of those, including one in March 1995, not found between items 5 and 6 in my learned friend's chronology and we will see that in the application book 256, item 214.

Next, it is suggested that there is nothing untoward about reverting to part of - and I stress "part of" the 1994 reasons in order to maintain the approach taken by the Court of Appeal. We stress it requires dissection of the 1994 judgment, not acceptance of its whole, in order to uphold the Court of Appeal's approach. Everything that his Honour had described as "tentative", which included all the matters that were most serious against my clients, has to be excised in order to excise the irregularity to which their Honours in the Court of Appeal referred.

At pages 197 and 198, the proper flavour, the proper character of what had happened below was perceived by their Honours when they described a fair reading of the 1994 judgment as suggesting that the judge had all but made up his mind on the question, this being a question which, of course, my client had not had an opportunity to confront. Furthermore, the case was then going to continue and did continue, notwithstanding the course taken with pleadings and non-pleadings of forgery, described at 198, line 20. My clients:

were required to re-argue questions against the background of tentative views and express findings about Mr Savage's credit.

Express findings made at a time when there was no issue presented on those matters. At pages 232 and 233 their Honours draw those threads together, so as to characterise what they saw as the evil that had occurred below. At line 30 or so:

The analysis of the evidence which we have undertaken demonstrates that the case for the plaintiffs should have been accepted.

That is a case different from the one regarded by his Honour as the proper approach. His Honour had held below that it was because, and only because, Mr Savage could not exclude that he had forged, that laches failed, and it was only because laches failed that the plaintiffs won. The preceding paragraph on page 232 put that into the correct context as their Honours there said his Honour:

in effect found that the forgery occurred in 1976 at the instigation of Mr Savage.

We have thus returned to the very position which could not be done without appropriate pleadings and the pleadings had been very deliberately withdrawn, it would have been the appropriate vehicle for that.

There is in 1996, on the question of forgery, and critically on the question of who and when, the demonstration of ostensible bias which renders that the appropriate focus for an appeal which raises, in our submission, the important question of whether a Court of Appeal can both find that a trial finding and a conclusion should not have been expressed or reached as it was but then salvaged something from an earlier and anterior piece of reasoning in this case by ignoring what had been said about forgery.

At page 233, lines 15 and following, their Honours expressed the main reason for them achieving that result, as saying, there are no appeals against reasons, only against orders. Yes, but in this case the order were supported and supported only by the trial judge by reasons which demonstrated that the whole process was vitiated by bias. It is not the case that one can say of the first five days of a trial that what happened and is found during them is in order because on day six the judge does or says

something which gives rise to an apprehension of bias and that only affects the future. That is a fallacy, the apprehension of bias destroys the integrity of the whole process. If it please your Honours.

KIRBY J: Yes, the Court will adjourn shortly to consider this application.

AT 2.48 PM SHORT ADJOURNMENT

UPON RESUMING AT 2.50 PM:

KIRBY J: Despite the arguments of counsel for the applicant, the Court is not convinced that there are sufficient prospects of success on any of the grounds argued to warrant the grant of special leave to appeal in this case. It was correctly described by the Court of Appeal as extraordinary. In our opinion, it would be a serious mistake to ascribe to a reasonable observer a conclusion of judicial pre-judgment from opinions expressed tentatively by a judge sitting alone at successive stages of decision making in a case which is being tried before that judge. Accordingly, special leave to appeal is refused.

Is there an application?

MR McALARY: If your Honour pleases.

KIRBY J: Is there any reason why - - -

MR WALKER: No, your Honour.

KIRBY J: The application is therefore refused with costs.

The Court will adjourn in order to reconstitute for the succeeding motions.

AT 2.51 PM THE MATTER WAS CONCLUDED