SMM Solomon Ltd v Axiom KB Ltd [2017] SBCA 12; SICOA-CAC 14 of 2017 (13 October 2017)

IN THE SOLOMON ISLANDS COURT OF APPEAL

NATURE OF JURISDICTION:	Appeal from Judgment of The High Court of Solomon Islands (Brown J)
COURT FILE NUMBER:	Civil Appeal Case No.14 of 2017 (On Appeal from High Court Civil Case No. 258 2011)
DATE OF HEARING:	9 October 2017
DATE OF JUDGMENT:	13 October 2017
THE COURT:	Goldsbrough P Ward JA Hansen JA
PARTIES:	SMM SOLOMON LTD & ORS –V- AXIOM KB LTD & ORS
ADVOCATES: APPELLANT: RESPONDENT:	Mr. G. Gibson QC Mr. S. Mcleod Mr. S. Forrest Mr. F. Douglas QC Ms. N. Nygh Mr. G. Suri
KEY WORDS:	PERCEPTION OF BIAS: TEST: RECUSAL
EXTEMPORE/RESERVED:	RESERVED
ALLOWED/DISMISSED	ALLOWED
PAGES	1- 5

JUDGMENT OF THE COURT

1. The first part of this appeal concerns an application for leave pursuant to section 11 (2) (f) of the Court of Appeal Act [Cap 6]. Leave is sought to appeal the decision of 19 May 2017, perfected on 30 May 2017 wherein the judge dismissed an application brought by the Appellant seeking recusal.
2. The application was brought seeking recusal from an application of the Respondents alleging contempt and any interlocutory applications associated thereto.
3. Given that the judge in the court below made orders dismissing the application it is not submitted that this decision is not capable of founding material for an appeal. However, the interlocutory nature of the orders requires consideration of the question of leave.
4. This Court has considered the principles to be applied when considering the grant of leave. In Price Waterhouse v Reef Pacific Trading Ltd [1996] SBCA 6 when considering the grant of leave the court in that matter noted that: -

Grounds for Leave to appeal.

The Second issue for our consideration is: whether there are good grounds for leave to appeal. The grounds relied upon by the appellants are set out in the application for leave to appeal. We agree that the arguments set out therein constitute good grounds for leave. We set out these grounds:

1. The appeal raises questions of general public importance relating to the judicial duty to hear and determine interlocutory applications, including the right of parties to be heard on such applications.

2. The appeal raises questions of general public importance relating to the judicial duty to give proper reasons and adequate reasons for a determination upon interlocutory applications.

3. The appeal raises questions of importance relating to discretionary factors to be taken into consideration when determining interlocutory applications under Order 27 Rule 2 of the Rules.

We are not aware that these issues have been decided authoritatively by this Court. We would grant leave to appeal.

The above factors were regarded in Price Waterhouse as grounds for the grant of leave. No doubt there are other grounds which did not appear in Price Waterhouse that could be regarded as valid grounds for granting leave. In this instance we agree that the general principle as to the applicable test in a recusal application has already been set out by this Court and so does not require any definitive statement of principle to be set out for the first time.

5. What we do regard as being of general public importance is whether the test as set out meets the needs of this jurisdiction as it is or requires modification, as might be taken from the reasons given in the judgment the subject of this appeal. We do not agree that this appeal raises discretionary matters as dealt with in House v The King (1936)55 CLR 499. If circumstances indicate the same, recusal is not thereafter a matter or judicial discretion.
6. Interlocutory appeals can have the effect of delaying substantive proceedings and for that reason may not be allowed in all circumstances. However, where the question of recusal is in issue if the matter is not determined with finality prior to trial, substantial injustice may result.
7. In the event leave to bring the appeal is granted.
8. There is discussion contained in submissions concerning the extent of the order made in the court below and, indeed, of the application itself. Whilst we note that counsel appearing before the trial judge made their own positions clear in submissions before him, there is no consequent reference in his reasons determining what he felt to be the ambit of the application. We, therefore, are obliged to resort to the application itself, the reasons given and the words of the order made which are the subject of this appeal. From that material we conclude that the trial judge was asked to recuse himself from the substantive application, that is for contempt, and all matters relating to that application. We do not accept the submission that the decision appealed was that the judge recused himself from the interlocutory matters alone.
9. It is accepted on this appeal, and we agree, that the general, and well established, principle is that a judge should not sit if, in all the circumstances, a fair minded lay observer might entertain a reasonable apprehension that the judge might not bring an impartial and unprejudiced mind to the resolution of the issues involved in the matter. Authority for that general statement can be found in Johnson v Johnson (2000) CLR 488, referred to in submissions but also as adopted by this court in Price Waterhouse (supra).
10. It is further submitted, and we do not disagree, that application of the test may involve a two-stage process, an identification of the issues which may be said to lead the judge to decide the matter other than on its legal and factual merit and, following that identification, the logical connection between those issues and the matter to be determined. For the purposes of this judgment we propose to follow that test as submitted by counsel for the Respondent.
11. The issues put forward on the application for recusal arises from the judgment in the substantive claim heard in the High Court by Commissioner Brown (as he then was). Extracts from that judgment are set out in submissions from the Appellant and concern remarks made by the Commissioner in the course of his reasons for judgment. There is, in our view, little value in setting those remarks out in full. We simply note that it is not an issue on this appeal that the Commissioner was entitled to make such remarks and make such findings as he did. The purpose in identifying the remarks and/or findings is to do nothing more than identify the material required in the first part of the two-stage test set out above.
12. Those remarks primarily concerned an officer of the Appellant named Ochi who gave evidence before the Commissioner and who was in effect its Chief Operating Officer within Solomon Islands, but equally remarks were made concerning the conduct of a Mr. Pada. Remarks made about Mr. Ochi included remarks going to the conduct of the company he represented, that is to say the present Appellant company. The remarks included comments on disclosure of material “I find that [SMMS] had not disclosed all the material facts. . . “ and earlier “over-disclosure” which “does reflect badly on [SMMS] since the trial had been unduly prolonged. To summarise, Mr Ochi was found to be dishonourable, dishonest, deceitful, malfeasant and manipulative, didactic and opinionated as well as lacking in respect for Solomon Islanders. Such was the extent of the criticism of the man that even the Commissioner felt constrained to justify within his reasons for judgment why he had reached those conclusions “by plain facts” although it is not clear which plain facts he was then referring to.
13. Within this contempt application there was before the trial judge an interlocutory application for discovery. The subject matter of the contempt is said to be two letters which it has already been admitted were written by Mr. Pada who was an employee of SMMS but who, it is submitted by the Appellant was not authorised to write the letter in his official capacity as an employee. Thus, both Mr Pada and the Appellant company will come under scrutiny in this application.
14. We take the view that there is both a clear and logical connection between the identified remarks and the subject matter of this claim. In submissions from the Respondent the question is raised as to whether any judge who has made adverse findings against any litigant is therefore disqualified in hearing any case involving that same litigant again. We understand the submission and, in our view, it is not a valid submission, for a judge who in the course of a trial made adverse finding on particular points and expressed those findings with typical judicial restraint would not be so disqualified. A quick perusal of the reasons for judgment in the substantive matter, however, quickly reveals that this judgment was not so expressed.
15. Having identified the material basis for the application and the logical connection to the issues to be tried, we turn to the test applied by the learned judge in this matter. We note that the test is correctly expounded at paragraph 13 of the judgment. We further note the critical analysis of the test drawn from various sources, none of which appear to have been the subject of submissions before the learned judge. His conclusion appears to be that the test is less than helpful in the context of Solomon Islands. He arrives at that conclusion based on his analysis of the people of the Solomon Islands.
16. We could not disagree more. The flaw in his contention is nowhere more starkly illustrated when he, at paragraph 17, suggests that the lay observer (more familiarly referred to by scholars of the English common law as the “man on the Clapham Omnibus”) “rather presumes an initiate of an elite group, almost didactic in purpose.
17. An ordinary Solomon Islander, aware of the necessary facts, is the one who must be considered when applying the test. What would that ordinary Solomon Islander think if he knew what the judge had earlier said (and done) during an earlier judgment? The learned judge, we conclude did not apply the correct test.
18. We further note a suggestion in the reasons at paragraph 19 where it is set out that the Appellants seek to show that the judge has already made his mind up, and that somehow this is the correct matter to be shown on a successful recusal application. Yet this application is based not upon actual bias but perceived bias, and therefore the Appellants have not set out to show “pre-determination” as that paragraphs of the reasons for judgment suggests.
19. At paragraph 25 of his reasons for judgment the trial judge concludes that the fair-minded observer (and we remind the reader that we have concluded that the judge has misconceived that character) would not “conflate those facts with the earlier decision. We have already dealt with that below and we have reached a different conclusion on that matter.
20. At paragraph 26 of the reasons we note that the judge expresses confidence in his own ability to “fairly decide the issues”. No doubt he holds such confidence but, again, we consider this to be no more than a further manifestation of the application of the incorrect test. The test is not whether the judge has confidence in himself. The test is whether a well-informed observer possesses that confidence.
21. On the issue of waiver which was also raised before the trial judge, we agree with his finding that the Appellants had not by conduct waived their right to seek his recusal. This arose from the suggestion made in the court below that the Appellants had not raised the question at the earliest opportunity after it was established that the particular judge was assigned to hear the case. The recusal application was not made, for example, after a contested hearing and whilst a judgment was outstanding or even after judgment. It was made prior to the hearing of an interlocutory matter and no prejudice was occasioned by its timing.
22. In the event the appeal is allowed. We order that Brown J does not hear the application filed by the Respondent on 8 October 2015 in Civil Case No. 258 of 2011 or any interlocutory application associated with the application. Costs of and incidental to this appeal are ordered against the Respondent company including certification for overseas counsel, such costs to be agreed or assessed.
    

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Goldsbrough P

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Ward JA

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Hansen JA