British American Tobacco Australia Services Ltd v Laurie

• Jurisdiction: Australia Federal only
• Court: High Court (Australia)
• Judge: French CJ,Gummow J,Heydon,Kiefel,Bell JJ
• Judgment Date: 09 February 2011
• Neutral Citation: [2011] HCA 2,2011-0209 HCA A
• Docket Number: S138/2010
• Date: 09 February 2011

British American Tobacco Australia Services Limited

Appellant

and

Claudia Jean Laurie (As Administratrix Of The Estate Of Donald Henry Laurie And On Her Own Behalf) & Ors

Respondents

[2011] HCA 2

French CJ, Gummow, Heydon, Kiefel and Bell JJ

S138/2010

HIGH COURT OF AUSTRALIA

Bui v Director of Public Prosecutions (Cth)

Courts and judges — Bias — Reasonable apprehension of bias by reason of pre-judgment — Where judge previously made finding on same issue in unrelated interlocutory proceeding — Knowledge and characteristics to be attributed to fair-minded lay observer — Whether fair-minded lay observer taken to understand rules of evidence and procedure — Whether later statements of judge in recusal application relevant to fair-minded lay observer's assessment — Livesey v New South Wales Bar Association (1983) 151 CLR 288.

Words and phrases — ‘fair-minded lay observer’, ‘reasonable apprehension of bias’.

Representation

J R Sackar QC with P J Brereton SC and M J O'Meara for the appellant (instructed by Corrs Chambers Westgarth Lawyers)

D F Jackson QC with B F Quinn and S Tzouganatos for the first respondent (instructed by Turner Freeman Lawyers)

Submitting appearances for the second to fourth respondents

ORDER

Appeal allowed.

Set aside paragraph 2 of the order of the Court of Appeal of the Supreme Court of New South Wales made on 17 December 2009, and in place thereof order that the fourth respondent be prohibited from further hearing or determining proceeding 6057 of 2006 in the Dust Diseases Tribunal of New South Wales.

The appellant pay the first respondent's costs of the appeal in this Court.

French CJ

Introduction

1 In 1986 Mason J said 1:

‘It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party.’

That observation is applicable to this case.

2 British American Tobacco Australia Services Limited (‘BATAS’) contends that an interlocutory finding adverse to it in proceedings in the Dust Diseases Tribunal of New South Wales (‘the Tribunal’) should disqualify the judge who made the finding from presiding at the trial of subsequent proceedings brought against BATAS by another party. The adverse finding was that BATAS had dishonestly concealed the destruction of documents which might be prejudicial to it in litigation and had done so under the pretence of a Document Retention Policy.

3 The judge refused to accede to a motion by BATAS that he disqualify himself from presiding in the subsequent proceedings 2. On summonses issued by BATAS for leave to appeal against the judge's decision, and for prohibition against his Honour, the Court of Appeal of New South Wales by majority agreed with the judge. The Court of Appeal dismissed both summonses 3. BATAS appealed to this Court against the dismissal of the summons for prohibition. In my opinion the Court of Appeal was correct. The judge made it clear in the interlocutory ruling that he was basing his conclusions on the limited evidence put before him and that a different picture might emerge at trial. His finding would not appear, to a fair-minded lay observer, to give rise to a reasonable apprehension of bias in different proceedings some years later against the same defendant. In my opinion, which differs from that of the majority in this case, the appeal against the decision of the Court of Appeal should be dismissed. The

difference of views in the Court of Appeal and in this Court reflects the truth of the observation made by Aickin J about the test for apparent bias 4:

‘It is a test which is not always easy to apply for it may involve questions of degree and particular circumstances may strike different minds in different ways.’

Procedural history

4 Claudia Laurie is the plaintiff in proceedings in the Tribunal against BATAS. She is continuing proceedings against BATAS commenced by her late husband, Donald Laurie, in 2006 alleging that BATAS was negligent in the manufacture, sale and supply of tobacco products which he smoked from 1946 until 1971. Mrs Laurie also sues in her own right as a dependant widow under the Wrongs Act 1958 (Vic) and the Compensation to Relatives Act 1897 (NSW).

5 In her amended statement of claim filed on 13 July 2007, Mrs Laurie alleged, inter alia, that BATAS had a policy of destroying documents in its possession which might have evidenced its negligence. That allegation was made in support of a claim for aggravated damages. The document destruction policy was also pleaded in support of an inference that at all material times BATAS knew, or ought to have known, that the use of its tobacco products could cause lung cancer.

6 The pre-trial management and the trial of the action in the Tribunal were allocated to Judge Curtis, who conducted a number of directions hearings and heard evidence from Mr Laurie in the United States on 26 April 2006. That evidence was transcribed and videotaped. On 9 March 2009, BATAS filed a motion in the Tribunal seeking an order that Judge Curtis disqualify himself from further hearing or determining the proceedings. His Honour dismissed the BATAS motion and ordered that BATAS pay Mrs Laurie's costs.

7 BATAS filed two summonses in the Court of Appeal, one of which sought leave to appeal from the decision of Judge Curtis pursuant to s 32(4)(a) of the Dust Diseases Tribunal Act 1989 (NSW) (‘the DDT Act’). By the other BATAS sought prohibition against the judge under s 69 of the Supreme Court Act 1970 (NSW).

8 The Court of Appeal by majority (Tobias and Basten JJA, Allsop P dissenting) dismissed both summonses on the basis that a fair-minded lay observer would not reasonably apprehend, as a result of the previous interlocutory finding, that Judge Curtis may not bring an impartial and unprejudiced mind, in Mrs Laurie's proceedings, to the question whether BATAS had committed a fraud.

9 On 28 May 2010, this Court (French CJ, Hayne and Bell JJ) granted special leave to appeal against the decision of the Court of Appeal on the summons for prohibition.

The prior ruling by Judge Curtis

10 Judge Curtis made his interlocutory findings against BATAS in proceedings commenced by the widow of the late Mr Alan Mowbray against Brambles Australia Ltd (‘Brambles’). Mrs Mowbray alleged that her husband had contracted lung cancer as the result of exposure to asbestos while working for Brambles. Brambles cross-claimed against BATAS for contribution on the basis of Mr Mowbray's use of BATAS' tobacco products. Judge Curtis made an order in November 2002 that BATAS give discovery. BATAS claimed legal professional privilege in respect of most of the relevant documents.

11 In May 2006, Brambles obtained an order from Judge Curtis for further discovery from BATAS. In support of its motion for that order, Brambles adduced oral testimony from Frederick Gulson, who had been Company Secretary and in-house solicitor to BATAS 5 in 1989–90. It also tendered a transcript of testimony which Mr Gulson had given in proceedings in the US, and an affidavit sworn in February 2003.

12 Judge Curtis ruled initially that certain paragraphs from Mr Gulson's statements were prima facie covered by lawyer-client privilege 6. Brambles submitted that the testimony could be admitted by virtue of s 125 of the Evidence Act 1995 (NSW) on the basis that the allegedly privileged communication, which it evidenced, had been made in furtherance of the commission of a fraud. The asserted fraud, based upon Mr Gulson's testimony, was the dishonest concealment by BATAS, under pretence of a rational non-selective housekeeping policy, known as the Document Retention Policy, of its purpose of destroying prejudicial documents in order to suppress evidence in anticipated litigation. BATAS maintained that its policies and practices did not permit selective

destruction of prejudicial documents. His Honour said of that contention that it remained ‘a live issue for the trial.’ 7

13 Counsel for BATAS attacked the credit of Mr Gulson in cross-examination but did not put it to Mr Gulson that he was not telling the truth. Judge Curtis found that Mr Gulson's evidence stood uncontradicted but noted ‘[h]e has not yet been tested by a contrary version of events.’ 8 He accepted that there might be good reasons why BATAS had not called any rebuttal evidence, but added 9:

‘however, I must determine the proceedings now before me on the evidence now before me.’ (emphasis added)

His Honour observed that if BATAS was not selectively destroying scientific documents prejudicial to its position the question arose why lawyers rather than scientists were assigned to judge the value of the research material for the purposes of the policy. His Honour said 10:

‘This may be explained at the trial; however, the evidence of Mr Gulson gives rise to an obvious inference that has not yet been rebutted by BATAS.’

14 Judge Curtis's crucial finding for the purposes of s 125 was in the following terms 11:

‘I am persuaded on the present state of the evidence that BATAS in 1985 drafted or adopted the Document Retention Policy for the purpose of a fraud within the meaning of s 125 of the Evidence Act.’ (emphasis added)

And further 12:

‘ In the absence of evidence to the contrary, I infer that legal advice to the effect that destruction of documents pursuant to the terms of the policy was not contrary to law, was integral to the decision by BATAS to persist with its policy of selective destruction.’ (emphasis added)

His Honour found that communications made for the purposes of obtaining that legal advice were communications in furtherance of the commission of a fraud within the meaning of s 125. The passages of Mr Gulson's evidence in respect of which...