Locobail (U.K.) Ltd v Bayfield Properties Ltd

CourtCourt of Appeal
Docket NumberCase Nos. PTA1999/6041/A3 1. Pta1999/6578/B2 3. Pta1999/6639/A1 4. Pta1999/6093/C 5.
JudgeLORD CHIEF JUSTICE, MASTER OF THE ROLLS, VICE-CHANCELLOR
Judgment Date17 Nov 1999
JurisdictionEngland & Wales
Neutral Citation[1999] EWCA Civ 3004

[1999] EWCA Civ J1117-6

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Chief Justice

Master of the Rolls

and

Vice-Chancellor

Case Nos. PTA1999/6041/A3 1.

Pta1999/6042/A3 2.

Pta1999/6578/B2 3.

Pta1999/6639/A1 4.

Pta1999/6093/C 5.

Locabail (UK) LTD
Plaintiff
and
Bayfield Properties Ltd
Defendants
Barbara Hagan Emmanuel

and

Locabail (UK)
Plaintiffs
Ltd Locabail International Finance LTD
and
Waldorf Investment Corporation
Defendants
Ares Dimitros Emmanuel
Barbara Hagan Emmanuel

and

Margaret Timmins
Claimant
and
Timothy Gormley
Defendant

and

Mrs D Williams
Applicant
and
HM Inspector of Taxes
Respondent

and

R.
and
Bristol Betting and Gaming Licensing Committee, Ex Parte O'callaghan
Respondent
Applicant

1. Mr Anthony Mann QC and Mr James Barker (instructed by Messrs More Fisher Brown, London E1 6DA, for the Plaintiff)

Ms Hazel Williamson QC (instructed by Messrs Stephenson Harwood, London EC4M 8SH, for the Second Defendant)

2. Mr Anthony Mann QC and Mr James Barker (instructed by Messrs More Fisher Brown, London E1 6DA, for the Plaintiffs)

Ms Hazel Williamson QC (instructed by Messrs Stephenson Harwood, London EC4M 8SH, for the Third Defendant)

3. Mr Andrew Edis QC and Mr Ivan Woolfenden (instructed by Messrs Bartlett & Son, Liverpool L2 9QN for the Claimant)

Mr Robert Jay QC (instructed by Messrs Morgan Cole, Cardiff CF10 3DP for the Defendant

4. Mrs Williams appeared in Person

Miss Tess Gill (instructed by the Solicitor for the Inland Revenue, London WC2 2SG)

5. Miss Judith Jackson QC (instructed by Messrs Dolmans, Cardiff CF10 3DS for the Applicant)

Mr William Norris QC and Miss Lucy Moorman (instructed by Messrs Richards Butler, London EC3A 7EE for the interested party)

Mr David Lloyd Jones QC (instructed by the Treasury Solicitor, London, as Amicus Curiae)

Wednesday, 17 November 1999

LORD CHIEF JUSTICE, MASTER OF THE ROLLS, VICE-CHANCELLOR
1

This is the judgment of the court on five applications for permission to appeal. The applications have been listed and heard together since they raise common questions concerning disqualification of judges on grounds of bias. At the outset we acknowledge with gratitude the help we have received from Mr David Lloyd Jones QC who has made submissions on the law as an amicus.

2

In determination of their rights and liabilities, civil or criminal, everyone is entitled to a fair hearing by an impartial tribunal. That right, guaranteed by the European Convention on Human Rights, is properly described as fundamental. The reason is obvious. All legal arbiters are bound to apply the law as they understand it to the facts of individual cases as they find them. They must do so without fear or favour, affection or ill-will, that is, without partiality or prejudice. Justice is portrayed as blind not because she ignores the facts and circumstances of individual cases but because she shuts her eyes to all considerations extraneous to the particular case.

3

Any judge (for convenience, we shall in this judgment use the term "judge" to embrace every judicial decision-maker, whether judge, lay justice or juror) who allows any judicial decision to be influenced by partiality or prejudice deprives the litigant of the important right to which we have referred and violates one of the most fundamental principles underlying the administration of justice. Where in any particular case the existence of such partiality or prejudice is actually shown, the litigant has irresistible grounds for objecting to the trial of the case by that judge (if the objection is made before the hearing) or for applying to set aside any judgment given. Such objections and applications based on what, in the case law, is called "actual bias" are very rare, partly (as we trust) because the existence of actual bias is very rare, but partly for other reasons also. The proof of actual bias is very difficult, because the law does not countenance the questioning of a judge about extraneous influences affecting his mind; and the policy of the common law is to protect litigants who can discharge the lesser burden of showing a real danger of bias without requiring them to show that such bias actually exists.

4

There is, however, one situation in which, on proof of the requisite facts, the existence of bias is effectively presumed, and in such cases it gives rise to what has been called automatic disqualification. That is where the judge is shown to have an interest in the outcome of the case which he is to decide or has decided. The principle was briefly and authoritatively stated by Lord Campbell in Dimes v. The Proprietors of the Grand Junction Canal (1852) 3 HL Cas 759 at 793, when orders and decrees made by and on behalf of the Lord Chancellor were set aside on the ground that he had had at the relevant times a substantial shareholding in the respondent company:

"No one can suppose that Lord Cottenham could be, in the remotest degree, influenced by the interest that he had in this concern; but, my Lords, it is of the last importance that the maxim that no man is to be a judge in his own cause should be held sacred. And that is not to be confined to a cause in which he is a party, but applies to a cause in which he has an interest. Since I have had the honour to be Chief Justice of the Court of Queen's Bench, we have again and again set aside proceedings in inferior tribunals because an individual, who had an interest in a cause, took a part in the decision. And it will have a most salutary influence on these tribunals when it is known that this high Court of last resort, in a case in which the Lord Chancellor of England had an interest, considered that his decree was on that account a decree not according to law, and was set aside. This will be a lesson to all inferior tribunals to take care not only that in their decrees they are not influenced by their personal interest, but to avoid the appearance of labouring under such an influence."

5

The rule has been expressed in slightly different terms in different cases. In R. v. Rand (1866) LR 1 QB 230 at 232, Blackburn J. said:

"There is no doubt that any direct pecuniary interest, however small, in the subject of inquiry, does disqualify a person from acting as a judge in the matter …"

6

In R. v. Camborne Justices, ex parte Pearce [1955] 1 QB 41 Slade J., giving the judgment of the court, said at page 47:

"It is, of course, clear that any direct pecuniary or proprietary interest in the subject-matter of a proceeding, however small, operates as an automatic disqualification."

7

The basic rule is not in doubt. Nor is the rationale of the rule: that if a judge has a personal interest in the outcome of an issue which he is to resolve, he is improperly acting as a judge in his own cause; and that such a proceeding would, without more, undermine public confidence in the integrity of the administration of justice (see Dimes above, in the passage quoted, and R. v. Gough [1993] AC 646 at 661, per Lord Goff of Chieveley).

8

In the context of automatic disqualification the question is not whether the judge has some link with a party involved in a cause before the judge but whether the outcome of that cause could, realistically, affect the judge's interest. In Dimes the outcome of the litigation certainly could have had such an effect on the Lord Chancellor's personal position. In Clenae Pty. Ltd. & Others v. Australia and New Zealand Banking Group Ltd [1999] VSCA 35 (Supreme Court of Victoria) it was held that the outcome of the litigation could not have had such an effect. That will often be the case where the judge holds a relatively small number of shares in a large company and the sums involved in the litigation are not such as could, realistically, affect the value of the judge's shares or the dividend he could expect to receive. The correct approach was in our judgment taken by the majority in the Victoria Court of Appeal in the case cited where, giving the main judgment after reviewing English and Australian authority, Charles JA said (at paragraph 59 of the judgment):

"If there is a separate rule for automatic disqualification for financial interest, unrelated to a reasonable apprehension of bias, in my view the irrebuttable presumption of bias only arises (subject to questions of waiver or necessity) where the judicial officer has a direct pecuniary interest in the outcome of the proceeding."

9

Winneke P. agreed (at paragraph 3 of the judgment):

"… I agree with Charles JA that authority which binds this Court does not compel us to conclude that it is the mere shareholding by a judicial officer ("judge") in a party which, alone, constitutes the "disqualifying pecuniary interest", but rather it is the potential interest, created by that shareholding, in the subject matter or outcome of the litigation which is the disqualifying factor."

10

While the older cases speak of disqualification if the judge has an interest in the outcome of the proceedings "however small", there has in more recent authorities been acceptance of a de minimis exception: BTR Industries South Africa (Pty) Ltd v. Metal and Allied Workers' Union 1992 (3) SA 673 at 694; R. v. Inner West London Coroner, ex parte Dallaglio [1994] 4 All E.R. 139 at 162; Auckland Casino Ltd. v. Casino Control Authority [1995] 1 NZLR 142 at 148. This seems to us a proper exception provided the potential effect of any decision on the judge's personal interest is so small as to be incapable of affecting his decision one way or the other; but it is important, bearing in mind the rationale of the rule, that any doubt should be resolved in favour of disqualification. In any case...

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