Costs are reserved. If the respondents seek costs, a memorandum should be filed by them, within 14 days from the date of this judgment; Mr Fava to have 14 days to reply. We would then determine that application on the papers.

REASONS OF THE COURT
(Given by Hammond J)

Table of Contents

Para No
Introduction [1]
The law relating to recall applications [5]
The context of this recall application [7]
The facts relating to the recusal complaint [11]
Mr Fava’s central complaint [16]
The belated application to cross-examine Mr Simpson [17]
The merits of the recusal application [19]
A fresh and independent look has already been taken of Mr Fava’s
underlying concerns [27]
Conclusion [29]

Introduction

[1] This is yet another application to have a judgment set aside, on the basis that the hearing Judge should have recused himself and not sat on the case. In this instance, it is said, because the Judge’s daughter is a solicitor in the law firm representing the respondents.
[2] The issue has been raised in a rather convoluted procedural context. In the High Court Mr Fava, and certain companies with which he is associated, were ordered by Hugh Williams J to pay to the respondents costs of $2 million.[1] Mr Fava then applied to the High Court for a stay of execution of this costs judgment pending the hearing of an appeal against Hugh Williams J’s costs judgment. That application was declined by Venning J.[2] This is the judgment in question before us. Mr Fava then applied to this Court for a stay of execution. That application was dismissed.[3]
[3] Mr Fava now says that the judgment of Venning J should be set aside on the basis of the principles set out in Saxmere Company Ltd v Wool Board Disestablishment Company Ltd:[4] that a fair-minded lay observer might reasonably apprehend that there was a possibility of bias on the part of Venning J. He also seeks certain consequential orders, if the recall application is granted, which would enable him to revisit the merits of this entire dispute.
[4] After the hearing before us, and without obtaining leave, Mr Fava has filed further memoranda. In those papers he seeks to persuade us that he should be allowed to cross-examine Mr Simpson, whose conduct he seeks to impugn. We will deal with those matters shortly. Secondly, on 23 July 2010 he filed what appears to be an originating application, complaining about further professional misconduct on the part of Mr Simpson. It has no material bearing on what is before us. If it is to be pursued, it will have to be pursued separately in due course, in a Miscellaneous Motions list. We do not thereby imply that there is anything in that application; we just say that it has no present relevance.

The law relating to recall applications

[5] We need not dwell on this topic at any length. The test for recall in civil cases was recently restated by this Court in Erwood v Maxted:[5]

[3] The grounds upon which a judgment may be recalled are strictly limited. The leading statement in New Zealand as to recall of judgments is that of Wild CJ in Horowhenua County v Nash (No 2):[6]

Generally speaking, a judgment once delivered must stand for better or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are, I think, three categories of cases in which a judgment not perfected may be recalled – first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.

[4] That statement was most recently re-affirmed by the Court of Appeal in Unison Networks Ltd v Commerce Commission.[7] In Ngahuia Neihana Whanau Trust v Flight,[8] Anderson P said at [3]:

It is becoming a matter of concern not just to this Court but to others in the western common law system that disaffected litigants, usually appearing in person, repeatedly make application for recall judgments which they steadfastly refuse to accept. It is timely to characterise plainly unmeritorious applications of that sort as an abuse of the Court’s process and to reaffirm the rarity of legal justification for recalling judgments.

[5] Similarly in Faloon v Commissioner of Inland Revenue, at [13]:[9]

While the third category is not defined with particularity in the judgments, it is quite clear that the discretion to recall must be exercised with circumspection, and it must not in any way be seen as a substitute for appeal. In particular there are some things that it can be said the power to recall does not extend to. It does not extend to a challenge of any substantive findings of fact and law in the judgment. It does not extend to a party recasting arguments previously given, and re-presenting them in a new form. It does not extend to putting forward further arguments, that could have been raised at the earlier hearing but were not.

[6] Mr Fava relies on the third ground, above, namely, that for a special reason justice requires this recall.

The context of this recall application

[7] This long and bitterly contested litigation arises out of a joint venture between the parties in respect of a shopping centre at Whangaparaoa. The history is conveniently set out in concise form at [3] to [8] of our judgment of 23 March 2010.[10] It is not necessary to repeat it here. It suffices to say for present purposes that after many days of evidence and argument the case did not proceed to judgment on the merits. On 6 December 2006, while the case was proceeding, Mr Fava was adjudicated bankrupt. As a consequence, his companies, the other appellants, were left without directors. Their counsel thereupon withdrew for lack of instructions. Hugh Williams J then entered judgment for the defendants, now the respondents, under r 485 of the then High Court Rules. Subsequently, the respondents sought costs. After a six day costs hearing early in 2009 Hugh Williams J delivered an extensive costs judgment of some 156 pages against Mr Fava and his interests, with the result that they became liable for $2 million.[11] This judgment was delivered shortly after Mr Fava had been discharged from bankruptcy. The respondents took steps to enforce the costs judgment in their favour.
[8] Mr Fava immediately appealed against the costs judgment. Neither his companies nor he had the resources to meet it. It was inevitable that Mr Fava would go bankrupt again if he could not get the costs judgment set aside.
[9] Subsequently Mr Fava became aware of the decision of the Supreme Court of New Zealand in Saxmere. Armed with that judgment as inspiration, he then fossicked about for something on which to impugn Venning J. He ascertained that Venning J has a daughter, Kate, who is employed by Bell Gully, the solicitors for the respondents. She is a litigation lawyer in the Auckland office of that firm.
[10] Mr Fava’s complaint is that because of that factor Venning J should not have sat on the recusal application made to the High Court. He then reasons that that judgment, and all the downstream High Court orders thereafter, should be set aside and that this Court should recall its March 2010 judgment. Little imagination is required to see that Mr Fava’s tactical purpose in all of this is to revive the substantive proceedings he was never able to pursue because of his impecuniosity.

The facts relating to the recusal complaint

[11] The essential facts on which Mr Fava relies are not in dispute. At the relevant time Ms Venning was (and still is) employed at Bell Gully, the respondents’ solicitors. She commenced work there in February 2009. She was admitted to the bar in September 2009. From the time she commenced employment down to the present time her supervising partner at Bell Gully has been Mr Ian Gault. Ms Venning has had no connection whatsoever with this litigation. Mr Simpson of Bell Gully, whose conduct Mr Fava has heavily criticised in this litigation, is not responsible for providing Ms Venning with work. Nor was he responsible for supervising her work or undertaking performance reviews for Ms Venning.
[12] Venning J has advised this Court by a memorandum (which counsel have also seen) that when his daughter was admitted as a barrister and solicitor “I had occasion to review the Guidelines for Judicial Conduct, particularly as they relate to close relationships in the circumstances in which a judge should consider disqualification.” The Judge has said he was also cognisant of the judgment in Muir v Commissioner of Inland Revenue[12] and those of the various Supreme Court Judges in Saxmere.[13] The Judge observed:

against those principles and with my daughter’s employment as a lawyer in Auckland in mind, I have been conscious of the need to strike a balance to ensure my daughter’s ability to pursue a career in litigation and the need not to lightly recuse myself and thus burden my judicial colleagues with additional work on the other hand, against the proper concerns of litigants before the court on the other.

[13] In forming his own scheme of appropriate conduct, the Judge formed the view that he should not sit on cases where his daughter was counsel. If Mr Gault as her supervising partner was on the record as the solicitor for the parties he would advise both sides. He said he would definitely recuse if Ms Venning had any input into the file. But even if she did not, he would “likely recuse myself in any event if the other party objected because of her direct contact with Mr Gault on a regular basis”. If Bell Gully was a party to the litigation he would raise that, “depending on the nature of the application or case before the court”.
[14] We mention the Judge’s views, for two reasons. First, the Judge had actively considered, right from the time Ms Venning’s employment arose, what his position should be if he was sitting on cases in which Bell Gully are involved. And secondly, it illustrates that a variety of circumstances can arise in respect of which it is impractical to give across the board, absolute answers. As is routinely observed in the law, in matters of this kind context is everything.
[15] In any event, after he had failed to get a stay both in the High Court and in this Court, on 25 May 2010 Mr Fava made the present application.

Mr Fava’s central complaint

[16] The heart of Mr Fava’s complaint is that his appeal against the costs judgment is largely based on Mr Simpson’s alleged fraudulent behaviour. He considers that, when that appeal is heard – it is still pending – he will be able to prove to the Court of Appeal that, contrary to Hugh Williams J’s findings, Mr Simpson (among others) was fraudulent, with the consequence that the costs order will be completely set aside. He needed to have execution of the costs judgment stayed so that he had the opportunity to persuade the Court of Appeal of the fraud. His central argument is that a reasonable observer would conclude that Venning J would be reluctant to acknowledge the possibility that Mr Simpson was fraudulent, as a finding to that effect might so enrage Mr Simpson and Bell Gully in general that they would block the advancement of Ms Venning’s career within that firm or, at least, Venning J might reasonably fear that could happen.

The belated application to cross-examine Mr Simpson

[17] Mr Fava had made an application to us to cross-examine Mr Simpson at the hearing before us. He withdrew that application during the course of argument. But now he has – informally – applied to “reinstate”. He maintains that Mr Simpson “serially misled” the High Court.
[18] The difficulty with this is that Mr Fava is seeking to revisit the substantive findings of fact and law in the judgment under appeal. That is the very thing which this Court eschewed in Erwood v Maxted.[14] We decline this application.

The merits of the recusal application

[19] First, Mr Fava did appear to recognise the enormity of what he was suggesting. For his contention to work, not only would the Judge have to be biased or ill-disposed towards him and his interests, but also Mr Simpson – the senior litigation partner in a large law firm – would have to be sufficiently ill-disposed towards Ms Venning that in the event of a result against the firm’s client, that partner would – likely unlawfully in employment law terms – then take it out on her. As Tipping J noted in Saxmere[15] it is what the observer might reasonably think which matters. The proposition advanced by Mr Fava is, frankly, fanciful. The identified relationship does not in and of itself give rise to a reasonable apprehension of bias.
[20] Secondly, in relation to the second limb in Saxmere, there has not been identified a logical connection between the Judge/daughter relationship, and any identifiable concern over a “feared deviation” from the course of deciding the matter before the Judge on its merits.
[21] Our attention was not drawn to any authority in the British Commonwealth on the issue before us. We are aware of none. We are aware of one appellate authority in the United States federal jurisdiction which raised similar issues: United States of America Ex rel Weinberger v Equifax, Inc.[16] That case concerned a claim under the US False Claims Act, which is directed to false or fraudulent claims in relation to government payments. After an adverse holding against him, Mr Weinberger appealed the Federal District Court Judge’s failure “to stand recused after discovering that his son was an associate of the law firm representing Equifax”. This was coupled with other allegations of supposed instances of bias or prejudice by the Judge.
[22] In American federal jurisprudence there is a statutory scheme for disqualification of a Judge for bias.[17] One of the provisions is that a Judge “shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.”
[23] In Equifax the United States Court of Appeals held that:[18]

It is undisputed that the district judge’s son did not actively participate in Equifax’s defence. That the son’s law firm participated in the proceeding does not mean that he was ‘acting as a lawyer in the proceeding’ [citation given]. That provision requires actual participation. The fears of judicial bias that might result from an offspring’s active participation in a proceeding do not merit automatic disqualification of the law firm to which the relative belongs. The ‘financial interest’ provision might apply if the district judge’s son were a partner in the firm. But his status as an associate removes that fear. His salary interest as an associate is too remote to fall under [the] ‘financial interest’ prohibitions.

[24] There is also a provision in the federal statute which requires a Judge to examine “whether his impartiality might reasonably be questioned”. The Judge took the view that, in the particular case, he did not fall within this provision. The United States Court of Appeals agreed.
[25] We see this matter in the same sort of terms. That is, the presence of Ms Venning as a salaried employee in Bell Gully was not disqualifying. We do not have to address the more complicated issues which arise if she was a partner, and we do not do so.
[26] Finally, although we do not consider that Venning J was obliged to recuse himself in this instance, we do not think he could have been criticised had he chosen to do so, as a prudential measure. As has been said, “It does come down to an evaluation of competing practical considerations, and where the balance of the greater prudential wisdom lies. Judges need have no shame about determining such an issue on that basis.”[19]

A fresh and independent look has already been taken of Mr Fava’s underlying concerns

[27] Even assuming, solely for the purposes of argument, that Venning J should not have sat on the High Court stay application, that is not the end of the matter. In the March 2010 hearing this Court had before it, quite independently of Venning J, to consider whether there was a proper basis for a stay of the costs judgment. For the reasons it then publicly gave, and which it is not necessary for us to enlarge upon here, this Court took the view that there was no appropriate basis to order a stay.
[28] We do not propose to labour this judgment in retraversing those reasons. It suffices to say that Mr Fava has already had an independent and unbiased review of the circumstances of this case, admittedly in the context of whether a stay of execution should be ordered. That makes his burden on a recall application even heavier.

Conclusion

[29] It has to be said that Mr Fava is clutching at a straw – heavily waterlogged though it is – in an endeavour to turn it into something approaching a rescue raft for his lost proceedings. There is nothing in this application.
[30] The application for a recall is dismissed.
[31] Costs are reserved. If the respondents seek costs, a memorandum should be filed by them, within 14 days from the date of this judgment; Mr Fava to have 14 days to reply. We would then determine that application on the papers.

Solicitors:
Bell Gully, Auckland, for Respondents

[1] Churchill Group Holdings Ltd v Aral Property Holdings Ltd HC Auckland CIV-2001-404-2302, 22 December 2009.

[2] Churchill Group Holdings Ltd v Aral Property Holdings Ltd HC Auckland CIV-2001-404-2302, 27 January 2010.

[3] Churchill Group Holdings Ltd v Aral Property Holdings Ltd [2010] NZCA 88.

[4] Saxmere Company Ltd v Wool Board Disestablishment Company [2009] NZSC 72, [2010] 1 NZLR 35 [Saxmere].
[5] Erwood v Maxted [2010] NZCA 93.
[6] Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at 633.
[7] Unison Networks Ltd v Commerce Commission [2007] NZCA 49 at [10].
[8] Ngahuia Neihana Whanau Trust v Flight CA23/03, 26 July 2004.
[9] Faloon v Commissioner of Inland Revenue (2006) 22 NZTC 19,832 (HC).
[10] Above n 3.
[11] Above n 1.
[12] Muir v Commissioner of Inland Revenue [2007] NZCA 334, [2007] 3 NZLR 495.
[13] Above n 4.
[14] At [5].
[15] At [48]. (Emphasis added.)

[16] United States of America Ex rel Weinberger v Equifax, Inc [1977] USCA5 1395; 557 F 2d 456 (5th Cir 1977).

[17] 28 USC §455. The statutory provisions are set out as Appendix C in Grant Hammond Judicial Recusal: Principles, Process and Problems (Hart, Oxford 2009) at 161-162.
[18] At [23].
[19] See Hammond, n 18, above at 80.

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