Judge not disqualified from hearing application to set aside his earlier judgment

Summary

The plaintiffs' application to revisit an administrative decision of the List Judge to assign Venning J to this case was unsuccessful. The plaintiffs argued that Venning J should be disqualified from hearing their application to set aside his earlier judgment on the basis of his prior involvement.

Impact of decision

This judgment confirms that there are limits on the circumstances in which the Courts will order matters (which are remitted for rehearing) to be before a new Judge or panel of Judges.

Facts

On 19 December 2008, the Supreme Court upheld the High Court and Court of Appeal decisions that the Trinity investment scheme was tax avoidance; Ben Nevis Forestry Ventures Ltd and Others v CIR (2009) 24 NZTC 23,188.

In these proceedings the plaintiffs (some of which were appellants in the Supreme Court) sought to set aside the judgment of the High Court delivered on 20 December 2004 on the basis that the Commissioner presented a false case. The Commissioner entered a protest as to jurisdiction and sought to dismiss the proceedings.

When these proceedings first came before Associate Judge Faire, he determined that a Judge should deal with this matter and consequently referred it to the Civil List Judge for the allocation of a Judge. Venning J, who decided the High Court decision in 2004, was assigned.

The plaintiffs filed memoranda submitting that the file should not have been assigned to Venning J and sought to revisit or review that administrative decision. It was, effectively, an interlocutory application for Venning J to disqualify himself and for another Judge to be assigned.

Decision

The plaintiffs argued that there is a "prior involvement" principle which supports the disqualification of Venning J and that such situations include a decision-maker:

1. hearing an appeal or review from his/her own decision;
2. rehearing a case that has been remitted to him/her by review in Court;
3. hearing a fresh proceeding asserting the earlier decision should be set aside based on a false case: Kuwait Airways Corporation v Iraqi Airways Corporation [2003] 1 Lloyd's Rep 448.

Venning J held that neither of the situations in a) or b) applies in this case and that the decision referred to in c) is not authority for the proposition advanced by the plaintiffs.

The plaintiffs also argued that while there was not a legal test or even a legal requirement on the facts of this case requiring Venning J to stand aside, "pragmatism" ought not to be ignored. The plaintiffs finally argued that if the case is heard by Venning J, the plaintiffs may have a feeling of pre-determination by the Court.

Venning J held that the authorities and texts that the plaintiffs referred to to support the applicability of the "prior involvement" principle were primarily directed at the situation where a decision has been reviewed or overturned and the issue has been remitted back to the decision-maker, effectively for a second hearing. That is not the case in these proceedings since the decision has been substantially upheld through the appeal process.

Venning J accepted the submission of the Commissioner that:

• ... the rationale that underlies the desirability of a fresh decision-maker being involved, if the mater is remitted, is that it avoids the decision-maker having to effectively determine facts that the decision-maker had previously determined. (paragraph [20])

The prior involvement principle may also extend to other cases such as where the decision-maker is hearing a review from his/her own decision. That, however, is not the case here.

Venning J accepted that important principles underlie the decisions in Re Pinochet [1999] 1 All ER 577 (no person should be a judge in their own cause) and Saxmere Company Ltd v Wool Board [2009] NZSC 122 (a reasonable, fair minded and informed observer might be concerned at the financial relationship between the Judge and counsel) but the principles must be applied to the facts and these principles are not triggered by the facts in this case.

Regarding the submission that parties may have a feeling of pre-determination because of the previous findings of the Court adverse to their case, Venning J found that the position for refusing disqualification here was even stronger than in JG Russell v Taxation Review Authority & Commissioner of Inland Revenue CIV 2005-404-5203 19 December 2008 where the applicant sought unsuccessfully to have Barber DCJ recused on the grounds that, effectively, there was a perception that the Judge had already made up his mind as he had ruled on a number of occasions against entities using the "Russell" template. Venning J agreed with the High Court in JG Russell that there cannot be presumptive bias where the rulings of the Judge, although consistently adverse to a party's interests, have nevertheless been consistently in accordance with the law. Venning J noted that:

• The findings in this Court have been substantively upheld by the Court of Appeal and Supreme Court. They have been held to be in accordance with the law. (paragraph [32])

Venning J concluded that the plaintiffs are entitled to expect a fair and impartial hearing of their case on its merits and they will have that. They are not entitled to select (by way of disqualification without proper basis) the Court that will hear their case. The allocation of Judges to cases is an administrative matter for the Court.