Judge conflicted out of presiding over both the GetSwift shareholder class action and the concurrent ASIC regulatory action
Court finds that judge might not bring an impartial mind to the proceedings, decides that it is inappropriate for the same judge to hear both proceedings.
In this decision, the Full Court upheld the respondents’ appeal from Lee J’s decision in Webb v GetSwift Ltd (No 6)  FCA 1292, in which his Honour refused to disqualify himself from hearing the class action. Justice Lee had earlier determined that he would hear the class action as well as the related ASIC civil penalty proceeding (see Webb v GetSwift Ltd (No 5)  FCA 1533), which concerns substantially the same underlying allegations. Judgment in each proceeding was to be only based upon the evidence and argument put forward in that individual proceeding. The trial of the class action was scheduled to commence while judgment on liability in the ASIC proceeding was reserved.
The respondents contended that Lee J should have disqualified himself from hearing the class action on the basis that a reasonable apprehension of bias existed. In essence, the respondents contended that the reasonable observer might apprehend that his Honour might not be able to disregard the evidence adduced in the ASIC proceeding when deciding the class action, and vice versa. The applicant neither opposed nor supported the appeal. The Court-appointed contradictor (Justin Gleeson SC) supported Lee J’s proposed approach and submitted that the appeal should be dismissed.
The Full Court observed that the test for apprehended bias is “whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question he or she is required to decide” (at ). There is a variety of ways in which the impartiality of the court may appear to be compromised. The present case concerned “extraneous information”, being “where the judge has knowledge of some prejudicial but inadmissible fact or circumstance giving rise to the apprehension of bias” (at ).
The Court held that in the circumstances confronting Lee J, there would be a real difficulty of disregarding the extraneous information. Indeed, his Honour would not simply be required to disregard the evidence of one witness on a discrete topic. Rather, in determining the class action, Lee J would be required to disregard the evidence of 30 to 33 lay witnesses, an expert, and the submissions made by the parties in the ASIC proceeding. On the other hand, in determining the ASIC proceeding, his Honour would be required to disregard the evidence of four experts and the submissions made by the parties in the class action. In these circumstances, the Court said (at ):
The hypothetical observer looking at the reality of the process might apprehend that it might be difficult for any person, even a professional judge, confronted with different and potentially conflicting evidence and submissions in different proceedings (albeit proceedings directed to the same underlying transactions and issues) to decide the [class action] without the contamination of the extraneous information. As a result the hypothetical observer might reasonably apprehend that the judge might be influenced subconsciously by the extraneous information in deciding the issues in the [class action].
The Court also did not agree with Lee J’s finding that the fair-minded observer would recognise that the documentary evidence would be “the most important evidentiary material” (at ). The Court observed that “[t]he choice between documentary and witness evidence is not always clear cut” and “[i]n some instances at least, the witness evidence might be preferred” (at ). The Court also observed that witness evidence can address matters that are not addressed by documentary evidence. In the present case, one such area was the “key issue” of materiality, in respect of which different expert evidence would be led in the class actions than was led in the ASIC proceeding.
The Court acknowledged that Lee J had been “properly and selflessly motivated by a desire to achieve great economies” when determining to case manage and hear both proceedings (at ). However, the Court said that “the principle of impartiality will override any case management consideration” and although a cost-benefit approach to case management may be encouraged, “it must be tempered by the rule of law and the importance of upholding confidence in the administration of justice” (at ). The Court also observed that the fact that all of the parties to the class action and the ASIC proceeding either supported or did not oppose Lee J’s disqualification “does suggest caution should be exercised in not acceding to the application for disqualification” (at ). Finally, with respect to Lee J’s decision to hear the disqualification application himself, the Court said that “this appeal shows that it may be more prudent for an independent mind (or minds) to consider disqualification applications on some occasions”, and “[t]his approach may assist to promote confidence in the legal system, which after all is a key rationale for the apprehended bias rule” (at ).
The Full Court thus allowed the respondents’ appeal and ordered that the class action be referred to the National Operations Registrar for reallocation to another judge.
GetSwift Ltd v Webb  FCAFC 26
Federal Court of Australia, Middleton, McKerracher and Jagot JJ;
5 March 2021
Applicant’s Solicitors: Phi Finney McDonald;
Respondent’s Solicitors: Quinn Emanuel Urquhart & Sullivan;
Applicant’s Funder: Therium Capital Management Ltd;
ASIC’s Solicitors: Johnson Winter & Slattery
Austlii link: Accessible here
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