Supreme Court allows appeal on objective bias due to judge's shareholding in a party company without prior inquiry.

THE SUPREME COURT

Appeal No. 579/2012

580/2012

581/2012

Denham C.J.

Hardiman J.

Clarke J.

MacMenamin J

Dunne J.

Between/

Goode Concrete

Plaintiff/Appellant

and

CRH Plc, Roadstone Wood Limited,

Kilsaran Concrete

Defendants/Respondents

Judgment delivered on the 31st day of July, 2015, by Denham C.J.

1. In these appeals the appellant alleges objective bias by a High Court judge, arising from his shareholding in CRH Plc. This is an issue

of importance to the parties, but it is of even more significance as it is required to be considered in the context of the administration

of justice.

2. Goode Concrete, the plaintiff/appellant, is referred to as “the appellant”. CRH Plc and Roadstone Wood Limited, the first and second

named defendants/respondents, are referred to respectively as “the first and second respondents”. Kilsaran Concrete, the third

named defendant/respondent, is referred to as “the third respondent”. The first, second and third named respondents are referred to

collectively as “the respondents”.

3. The appellant has appealed three judgments and orders of the High Court (Cooke J.). These orders are:-

(a) A judgment delivered on the 20th January, 2011, [2011] IEHC 15, and an order made on the 20th January, 2011,

perfected on the 2nd February, 2011, whereby an application for interlocutory injunctive relief made by the

appellant was refused and an order for the costs of that application was made in favour of the respondents.

(b) A judgment delivered on the 21st March, 2012, [2012] IEHC 116, and an order made on the 21st March, 2012,

perfected on the 8th May, 2012, whereby applications brought by the respondents for security for costs were

granted and it was ordered that the appellant provide security to the respondents on a phased basis.

(c) A judgment delivered on the 15th May, 2012, [2012] IEHC 198, and an order made on the 15th May 2012,

perfected on the 17th May, 2012, where the appellant was ordered to provide security for costs to the first and

second respondents in the amount of €110,000 and to the third respondent in the amount of €85,000.

Grounds of Appeal

4. The single ground of appeal upon which the appellant was given leave to appeal is as follows: - that the learned trial judge erred in

law in hearing and determining these applications in circumstances where there was or could have been a perception of bias on his

part due to his holding of interests in the shares of the first named respondent, which interests had not been disclosed and were

unknown to the appellant.

Background

5. The proceedings were first before the High Court on the 26th November, 2010, when the appellant sought entry of the case to the

Competition List.

6. At that time Cooke J. indicated that he had shareholdings in CRH Plc. The words of Cooke J. may be found in the transcript and are

as follows:-

“JUDGE: There is one thing I should mention, that I don’t know whether it causes a problem or not, but I have a vague

feeling that a very small number of CRH shares feature somewhere in my pension fund.

MR. SREENAN: I see. Well, I don’t know whether I should commiserate or not, Judge.

JUDGE: However, you’d better consider it.

MR. SREENAN: Absolutely. Thank you, Judge.”

[Transcript 26 November 2010, page 2 lines 31 to 33 and page 3 lines 1 to 3]

Mr. Paul Sreenan, S.C., appeared as counsel for the first and second respondents.

7. The appellant has submitted that the declaration was considered, and that given the nature of the declaration, and the fact that it

would not be unusual for a person to hold a very small number of shares of a public company in a pension fund, the appellant had no

difficulty with Cooke J. hearing the matter.

8. The appellant submitted that it became apparent later that the full extent of the financial interests held by the learned trial judge

had not been revealed. On the 26th September, 2012, Mr. Peter Goode received information of the learned trial judge’s shareholdings

in CRH Plc, including that additional interests in the shares in CRH Plc were acquired by the learned trial judge on the 9th December,

2010, and that dividends were received on certain dates, including in May, 2012.

9. It was submitted on behalf of the appellant that the number of shares which appeared to be held by the learned trial judge or on

his behalf after the December 2010 purchase, and at times when he heard and decided the matters now under appeal, was at least

8,966 shares. Taking a share price of €15.15, which was the closing share price of CRH Plc on the 9th December, 2010, the value of

that holding was submitted to be approximately €135,835 on that date.

10. The solicitors for the appellant wrote to Cooke J. by letter dated the 16th October, 2012. Cooke J. indicated that the matter

should be raised in open court. The appellant then brought a motion seeking that the learned trial judge recuse himself from the

proceedings.

11. The motion came before the High Court on the 13th November, 2012, when Cooke J. set out details of his interests in the first

respondent, and informed the parties that he would no longer be involved in the proceedings.

12. On the 13th November, 2012, the learned trial judge explained in open court:-

“For 12 years prior to the end of 2008 I lived outside this country. When I retired from the European Court at the end of

2008 my wife and I sold the house we owned in Luxembourg, and the funds or the proceeds of that, together with other

monies we had in Luxembourg, were transferred back to this country and put into the hands of various advisers who were

acting on our behalf. My return also coincided with my reaching the age of 65, so that during 2009 I had to draw down

various pension investments. These advisers were engaged throughout 2009 and 2010 in setting up the usual ARFs and

PRSAs, as they are called.

When the matter came before me on the 26th November 2010 I was, of course, aware that these arrangements were

being put in place and the funds were being put into various retirement funds and investments, but I was not following

the matter on a day-to-day basis. When it came before me on the 26th November I was aware that I had a small holding

in CRH, which I had had for quite some time, and I had assumed that it had been transferred from the holding I had in

Luxembourg into the holdings here during 2009, and that was what was at the back of my mind on the 26th November. I

was not conscious of the fact that there had already been made or was about to be made an additional purchase of

shares in CRH, and your detective work has thrown up the date of the 6th December, which is used as the basis for an

insinuation that having had this case before me I then went out and bought further shares. You will have to take my word

for it, that at the time I was unaware, because that was one of what I have now checked was 15 different investments

over which the funds were spread in that latter half of 2010. It happens that the 6th December was, as I understand it,

the settlement date for that particular tranche that appears in the books of the stockbroker’s agents. The fact remains

that on the 26th November I alerted the parties to the fact that there was, as a matter of fact, this interest in CRH

shares. If anybody had had the courtesy to come back to me at any stage I would have made the necessary inquiries if

the actual numbers of shares was a matter of concern, and I would have quite happily saved myself the task of writing

three written judgments over the next year, and arrange for the matter to be transferred to another Judge.”

Submissions

13. Written and oral submissions were before the Court from the appellant and the respondents.

14. The appellant advanced the following arguments, inter alia:-

(i) A pecuniary interest such as that held by Cooke J. ought to result in the automatic disqualification of the judge

from hearing the proceedings or, where judgment has already been given, the automatic setting aside of the

judgment.

(ii) If there is a de minimis exception to the rule of automatic disqualification, it is patently not satisfied in this case

given the extent of the known shareholdings of the judge.

(iii) If the appellant is wrong that automatic disqualification is the decisive principle and the Court decides that it

should not apply a rule of automatic exclusion, then, on the basis of the facts in this case, the judgments of Cooke

J. ought to be set aside in any event as a reasonable person would have a reasonable apprehension that the

appellant had not received a fair hearing.

(iv) The appellant submits that it was incapable of waiving what is a right for the benefit of the public at large. In

any event, there can be no question of the appellant having waived any right to argue objective bias, given (a) the

limited nature of the disclosure that was made and (b) the fact that shares in CRH were acquired on the judge’s

behalf after the disclosure was made (and the fact that this purchase was not subsequently disclosed). In this

regard it is of some significance that, notwithstanding that the discovery of the post-disclosure purchase of shares

was notified to the judge, he continued to maintain in correspondence that the position remained unchanged since

he made his disclosure in November 2010, before acknowledging the December 2010 transaction in Court on 13

November 2012.

(v) Ultimately, the test of objective bias is highly fact specific. This case does not fall into a “grey area”. The facts

in this case lead very clearly to the result that the judgments below should be set aside. The nature of the initial

disclosure, the absence of disclosure about the December 2010 purchase and the size of the known holding, which

the reasonable observer would consider was substantial, support this result.

15. The first and second respondent made submissions to the Court contending that the appellant was not entitled to succeed

because:-

(i) Contrary to the submission of the appellant, there is no rule of automatic disqualification in Irish law which

applies where a judge has a pecuniary interest in the outcome of a case. Not only does such a rule not form part of

Irish law, it would be inconsistent with the established Irish jurisprudence. Nor should such a rule be adopted into

Irish law, having been rejected in other common law jurisdictions.

(ii) The correct test to be applied is the well-established test for objective bias of whether a reasonable person

would have a reasonable apprehension of bias. This is an entirely objective test and the views held by the appellant

are entirely irrelevant.

(iii) The reasonable person is a well-informed observer who is aware of and gives due consideration to all relevant

facts and circumstances. He or she is also aware that judges take an oath to discharge their duties impartially and

is practical and not unduly sensitive.

(iv) A reasonable apprehension of bias would not arise merely because a judge has a shareholding in a party. It is

necessary to go further and establish that the outcome of the decision to be made by the judge would have an

impact on the price of the shares and consequently on the assets of the judge so that it can be said that the judge

has an interest in the outcome of the proceedings. The appellant has failed to, and could not, adduce any evidence

to support the proposition that the decisions of the trial judge under appeal could possibly have affected the share

price of CRH Plc.

(v) The relevant facts to be taken into account by a reasonable person considering whether there is a reasonable

apprehension of bias include that disclosure of the existence of a shareholding was made by Judge Cooke so that he

was entirely open in relation to it. Further, so far as Judge Cooke was aware, he only held a small number of shares

in CRH Plc, which shares were held in and formed a small part of his pension fund. With regard to the purchase of

shares after the admission of the proceedings to the Competition List, the judge was unaware of and could not

have been influenced by this. Furthermore, not only was the number of shares held by the judge very small in the

context of the market capitalisation of CRH plc, the decisions to be made by the judge on the issues before him

could not possibly have affected the share price of CRH Plc and, thus, the value of his shareholding. Having regard

to all of these facts, a reasonable person would not have a reasonable apprehension of bias.

(vi) Even if a reasonable person could form a reasonable apprehension of bias, any objection on this basis was

waived by the appellant. The appellant was aware, on the basis of the disclosure made by the judge, that he had a

shareholding and had no difficulty with the judge dealing with the proceedings. It was only after the appellant had

lost a number of applications that an allegation of bias was raised.

16. The third respondent submitted as follows:-

(i) The appellant was at all times aware of the fact that the learned trial judge had shareholding in CRH Plc as part

of his pension and chose not to object to his case managing, hearing and determining two separate interlocutory

applications. As such, it is submitted that the appellant should be estopped from raising a complaint as to bias,

when he expressly and/or impliedly abandoned the opportunity to make such a complaint at the hearing of any of

the interlocutory matters here under appeal.

(ii) The learned trial judge's declaration of interest on the 26th November 2010, was in all the circumstances of this

case sufficient to provide the appellant with the knowledge necessary to ground the appellant’s waiver of his right

to object.

(iii) Regardless of the waiver, it is submitted that although the ownership of shares in a listed public company may,

in some cases, constitute a form of association between a trial judge and respondent which has the potential to

bring into question the independence or impartiality of the said judge, it is submitted that the facts of the instant

case fall far short of those necessary to provide a basis for disqualification on grounds of bias, whether objective or

otherwise. A reasonable person in possession of all the relevant facts would not have a reasonable apprehension

that the appellant had not received a fair hearing.

(iv) There is no principle of automatic disqualification recognized under Irish law and applying the law in respect of

establishing objective bias suggests that a reasonable, fair minded observer, who was not unduly sensitive but was

in possession of all the relevant facts would not conclude that the learned trial judge’s holding of CRH shares as

part of his pension plan could give rise to a reasonable apprehension of bias against the appellant.

Decision

17. There is well settled law in this jurisdiction as to the test to be applied by a court when considering the issue of objective bias.

Reasonable person test

18. In Bula Ltd v. Tara Mines Ltd (No. 6) [2000] 4 I.R. 412 at p. 441 I stated:-

“It is well established that the test to be applied is objective, it is whether a reasonable person in the circumstances would have a

reasonable apprehension that the applicants would not have a fair hearing from an impartial judge on the issues. The test does not

invoke the apprehension of the judge or judges. Nor does it invoke the apprehension of any party. It is an objective test – it invokes

the apprehension of the reasonable person”.

19. In Kenny v. Trinity College Dublin [2008] 2 I.R. 40 at P. 45, Fennelly J. stated that the test had been described authoritatively in

Bula, in the words quoted above.

20. In Orange Limited v. Director of Telecoms (No. 2) [2000] 4 I.R. 159, Keane C.J. at p. 186 stated:-

“While the test for determining whether a decision must be set aside on the grounds of objective bias has been stated in

different ways from time to time by the courts in the United Kingdom, there is, in light of the two authorities to which I

have referred, Dublin Wellwoman Centre Limited v. Ireland [1995] 1 I.L.R.M. 408 and Radio One Limerick Ltd v. I.R.T.C.

[1997] 2 I.R. 291] no room for doubt as to the applicable test in this country: it is that the decision will be set aside on

the ground of objective bias where there is a reasonable apprehension or suspicion that the decision maker might have

been biased, i.e. where it is found that, although there was no actual bias, there is an appearance of bias.”

Keane C.J. stated also at p. 185:-

“In such cases, the courts proceed on the assumption that, where there is a reasonable apprehension of bias, the

decision must be set aside, although there is not the slightest indication that the decision maker was in fact actuated by

any bias.”

21. In O’Ceallaigh v. An Bord Altranais [2011] IESC 50, the appellant alleged objective bias. In describing the relevant principles,

Fennelly J. held:-

“34. The principles to be applied by our courts in adjudicating on allegations of objective bias have been well-established

for a number of years and, in particular, by two decisions of this Court delivered within two months of each other in the

year 2000. There is an inevitable tendency on the part of counsel to suggest that each new decision on a particular or

novel set of facts constitutes a development in the law. There are many individual instances of decisions on particular

facts. Here, it seems to me that our courts have merely been concerned to apply very well known criteria.

Fennelly J. continued that he believed:-

… that the law is comprehensively and authoritatively stated in the judgment of Denham J, delivered in July 2000, in Bula

v Tara (no.6). Having reviewed the law, and having considered, in particular, the decision of the House of Lords in Reg. v

Gough [1993] A.C. 646, she rejected the suggestion that our courts should adopt a test based on ‘a real danger of bias.’

She cited the decision of the High Court of Australia in Webb v The Queen (1993-1994) 181 C.L.R. 41 to similar effect.

She held, at page 441in favour of a test based on reasonable apprehension of bias:

‘However, there is no need to go further than this jurisdiction where it is well established that the test to be applied

is objective, it is whether a reasonable person in the circumstances would have a reasonable apprehension that the

Applicants would not have a fair hearing from an impartial judge on the issue. The test does not invoke the

apprehension of the judge or judges. Nor does it invoke the apprehension of any party. It is an objective test – it

invokes the apprehension of the reasonable person’.

36. The same test had been propounded by Keane C.J., in May of the same year, in Orange Communications Ltd. v Director of

Telecoms (No. 2) [2000] 4 I.R. 159 at 186 as follows:

‘While the test for determining whether a decision must be set aside on the ground of objective bias has been stated in

different ways from time to time by the courts in the United Kingdom, there is, in the light of the two authorities to which

I have referred, no room for doubt as to the applicable test in this country: it is that the decision will be set aside on the

ground of objective bias where there is a reasonable apprehension or suspicion that the decision maker might have been

biased, i.e. where it is found that, although there was no actual bias, there is an appearance of bias.’

37. The two cases to which the Chief Justice referred were Dublin Wellwoman Centre Limited v. Ireland [1995] 1 I.L.R.M. 408 and

Radio One Limerick Ltd. v. I.R.T.C. [1997] 2 I.R. 291.”

22. In O’Callaghan v. Mahon [2008] 2 I.R. 514 at p. 672, Fennelly J. described the principles relating to objective bias to be applied as

follows:-

“(a) objective bias is established, if a reasonable and fair minded objective observer, who is not unduly sensitive,

but who is in possession of all the relevant facts, reasonably apprehends that there is a risk that the decision maker

will not be fair and impartial;

(b) the apprehensions of the actual affected party are not relevant;

(c) objective bias may not be inferred from legal or other errors made within the decision making process; it is

necessary to show the existence of something external to that process;

(d) objective bias may be established by showing that the decision maker has made statements which, if applied to

the case at issue, would effectively decide it or which show prejudice, hostility or dislike towards one party or his

witnesses.”

23. Thus, the above are illustrations of the description of the test to be applied in situations where there is perceived objective bias,

and also illustrations of the application of the test.

Automatic disqualification test

24. There has been little written on the issue of an automatic disqualification of a decision maker in Ireland. In Orange Ltd v. Director

of Telecoms (No. 2) [2000] 4 I.R. 159 at p. 252, Geoghegan J. referred to situations of actual bias, objective bias, and:-

“A situation of apparent bias where the adjudicator has a proprietary or some other definite personal interest in the

outcome of the proceeding competition or other matter on which he is adjudicating. In that case there is a presumption of

bias without further proof.”

25. However, a rule of law as to automatic disqualification has not been developed in Ireland.

26. In general a judge recuses him or herself if he or she has an interest in a case, whether pecuniary or personal. In conjunction with

this process of recusal, the courts have applied the principles described earlier in established cases on the issue of objective bias.

27. In the United Kingdom a rule of automatic disqualification has been applied where the decision maker had a pecuniary or

proprietary interest.

28. The seminal case is Dimes v. Grand Junction Canal Co. Properties (1852) 3 H.L. Cas. 759. In that case the fact was that the Lord

Chancellor had an interest as a shareholder in a company which was a plaintiff in an action before him. The Lord Chancellor held

shares worth several thousand pounds. This fact was unknown to the defendants in the action. The House of Lords held that the Lord

Chancellor was disqualified, on the ground of interest, from sitting as a judge in the cause and that his decree was therefore voidable

and must consequently be reversed. The then Lord Chancellor pointed out that this was an appeal against the late Lord Chancellor

Cottenham. He stated that the opinion of the judges was that the interest of the Lord Chancellor was such as disqualified him from

judging in the cause. Lord Campbell stated at pp. 293 and 294:-

“I take exactly the same view of this case as do my noble and learned friends, and I have very little to add to their

observations. With respect to the point upon which the learned Judges were consulted, I must say that I entirely concur

in the advice which they have given to your Lordships. 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.”

29. The automatic disqualification classification in the United Kingdom appears to be based on the concept that justice must not only

be done but be seen to be done, as well as the maxim that no one should be a judge in their own cause. In R. v. Gough [1993] A.C.

646 at p. 661, Lord Goff stated:-

"[There] are certain cases in which it has been considered that the circumstances are such that they must inevitably shake public

confidence in the integrity of the administration of justice if the decision is to be allowed to stand. Such cases attract the full force

of Lord Hewart C.J.'s requirement that justice must not only be done but must manifestly be seen to be done. These cases arise

where a person sitting in a judicial capacity has a pecuniary interest in the outcome of the proceedings. In such a case, as Blackburn

J. said in Reg. v. Rand (1866) L.R. 1 Q.B. 230, 232: ‘any direct pecuniary interest, however small, in the subject of inquiry, does

disqualify a person from acting as a judge in the matter.’ The principle is expressed in the maxim that nobody may be judge in his own

cause (nemo judex in sua causa). Perhaps the most famous case in which the principle was applied is Dimes v. Proprietors of Grand

Junction Canal (1852). 3 H.L.Cas. 759, in which decrees affirmed by Lord Cottenham L.C. in favour of a canal company in which he

was a substantial shareholder were set aside by this House, which then proceeded to consider the matter on its merits, and in fact

itself affirmed the decrees. Lord Campbell said, at p. 793:

‘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.’

In such a case, therefore, not only is it irrelevant that there was in fact no bias on the part of the tribunal, but there is no question

of investigating, from an objective point of view, whether there was any real likelihood of bias, or any reasonable suspicion of bias, on

the facts of the particular case. The nature of the interest is such that public confidence in the administration of justice requires that

the decision should not stand."

30. Thus, while some of the cases in the United Kingdom describe this as an automatic disqualification, the facts are such that they

could fall under another classification.

Recent case law in United Kingdom

31. In AWG Group Ltd v. Morrison [2006] 1 W.L.R. 1163; [2006] EWCA Civ 6, the Court of Appeal in England addressed the issue of

apparent bias. The trial judge explained the circumstances as follows, at p. 1166:-

“3. At the outset of the hearing of the defendants' application I described my connection with AWG and with Mr. Jewson

in the following terms: AWG is a company whose primary business is supplying water to industry and the public in East

Anglia and in particular in Norfolk. My family are farmers/landowners in Norfolk and so in the area of operation of AWG. I

have had dealings with AWG, not always harmonious, over the years on such subjects as access for the purpose of

sinking boreholes and running pipelines. Mr Jewson lives in the next village to the village where I and my family live being

approximately one mile distant. Our families have known each other for at least 30 years. Our children are friends and we

have dined with each other on a number of occasions. Mr Jewson and I in the past were tennis players. Mr Jewson has

recently been appointed Lord Lieutenant of Norfolk. I would have the greatest difficulty in dealing with a case in which Mr

Jewson was a witness where a challenge was to be made as to the truthfulness of his evidence.

4. As is apparent the case which the claimants seek to make out against the defendants involves serious allegations

against prominent businessmen for whom, if those allegations are found proved, most serious consequences would follow

both in the damages which they might be required to pay and in the consequences that such findings would have for their

future careers."

32. The Court of Appeal in England and Wales then went on to describe the test for apparent bias, at pp. 1166 and 1167:-

“The test for apparent bias

4 As Mr Marshall made clear, his client's sole objection to Evans-Lombe J trying the case was the real possibility of

apparent bias. There was not, it should be emphasised, any suggestion of actual bias or personal interest. The judge had

no personal interest, pecuniary or otherwise, in the outcome of the litigation. In no sense would he be a judge in his own

cause. The detailed objections in Dechert's letter of 30 November 2005 (referred to in para 1 of the judgment) were

based entirely on an apprehension of the real possibility of apparent bias.

5 Upholding the bias objection on the eve of the trial would cause considerable disruption: the trial would have to be

adjourned, as there would be practical problems in finding a new trial judge at such short notice; the parties would suffer

additional costs resulting from the adjournment; and there would be delay in fixing a new trial date.

6 Inconvenience, costs and delay do not, however, count in a case where the principle of judicial impartiality is properly

invoked. This is because it is the fundamental principle of justice, both at common law and under article 6 of the

Convention for the Protection of Human Rights. If, on an assessment of all the relevant circumstances, the conclusion is

that the principle either has been, or will be, breached, the judge is automatically disqualified from hearing the case. It is

not a discretionary case management decision reached by weighing various relevant factors in the balance.

7 The test for apparent bias now settled by a line of recent decisions of this court and of the House of Lords is that,

having ascertained all the circumstances bearing on the suggestion that the judge was (or would be) biased, the court

must ask ‘whether those circumstances would lead a fair¬-minded and informed observer to conclude that there was a

real possibility … that the tribunal was biased’. Taylor v Lawrence [2003] QB 528, para 60. See also R v Gough [1993] AC

646; In re Medicaments and Related Classes of Goods (No 2) [2001] 1 WLR 700; Porter v Magill [2002] 2 AC 357; and

Lawal v Northern Spirit Ltd [2003] ICR 856.

8 As to the kind of circumstances in which there would be a real possibility of bias, the judge cited a pertinent passage

from another leading case, Locabail (UK) Ltd v Bayfield Properties Ltd [2000] QB 451, 480:

‘25 ….By contrast, a real danger of bias might well be thought to arise if there were personal friendship or animosity

between the judge and any member of the public involved in the case; or if the judge were closely acquainted with

any member of the public involved in the case, particularly if the credibility of that individual could be significant in

the, decision of the case ... or if, for any other reason, there were real ground for doubting the ability of the judge

to ignore extraneous considerations, prejudices and predilections and bring an objective judgment to bear on the

issues before him ... In most cases, we think, the answer, one way or the other, will be obvious. But if in any case

there is real ground for doubt, that doubt should be resolved in favour of recusal,’

9 Most of the leading authorities were appeals arising from hearings that had already taken place or were under way and

an objection to the judge was based on facts discovered during the course of, or only after the end of, the hearing.

Although this is a different case, as the hearing has not yet started, the same principle applies. Where the hearing has

not yet begun, there is also scope for the sensible application of the precautionary principle. If, as here, the court has to

predict what might happen if the hearing goes ahead before the. judge to whom objection is taken and to assess the real

possibility of apparent bias arising, prudence naturally leans on the side of being safe rather than sorry.”

33. The Court of Appeal in England and Wales held in AWG Group Ltd v. Morrison [2006] 1 W.L.R. 1163, that a judge was

automatically disqualified from hearing a case on the ground of apparent bias if, on the assessment of all the relevant circumstances,

the principle of judicial impartiality, the fundamental principle of justice, either had been or would be breached.

34. However, there is no need to import this comparative law. There is well established jurisprudence in Ireland, as discussed earlier in

this judgment. This is a case where the test to be applied is the “reasonable person” test.

35. A somewhat similar approach may be seen in Australia. In Ebner v. Official Trustee in Bankruptcy (2000) 205 C.L.R. 337, the issue

was one of judicial pecuniary interest. The majority of the Court held that there was no free standing rule of automatic disqualification

and that each case depends on the fair-minded lay observer test.

36. The facts of Ebner were that at the opening of a trial in the Federal Court of Australia, the trial judge disclosed that he was a

director and trustee of a family trust that had about 8,000 to 9,000 shares in a bank, and that he was a contingent beneficiary of the

trust. The bank was not a party to the proceedings but had a pecuniary interest in the outcome. The respondent objected to the

judge hearing the case, but the judge did hear and determine the matter. After the conclusion of an eighteen day trial, but before

judgment was given, the judge inherited 2,400 shares in the bank, which was the plaintiff, and defendant by counterclaim, in the

proceedings. The judge did not disclose his inheritance to the parties and subsequently delivered judgment in favour of the bank. It

was held by the High Court of Australia (Gleeson C.J., Gaudron, McHugh, Gummon, Hayne and Callinan JJ., Kirby J. dissenting) that the

judge was not disqualified from delivering judgment.

37. The majority of that Court held that there is no separate rule of automatic disqualification which applies where a judge has a

direct pecuniary interest, however small, in the outcome of the case over which he is presiding. They decided that the apprehension

of bias principle is to be applied to all cases in which it is suggested that, by reason of interest, conduct, association, extraneous

information or some other circumstance, a judge might not bring an impartial mind to the resolution of the case. In a judgment

delivered by Gleeson C.J., McHugh, Gummon and Hayne JJ., it was stated, inter alia, at p. 351:-

“The possible effect of the outcome of a case upon the value of assets owned by a judge may be a matter of serious

difficulty. However, in the ordinary case, where a judge owns shares in a listed public company which is a party to, or is

otherwise affected by litigation, and there is no other suggested form of interest or association, the question whether

there is a realistic possibility that the outcome of the litigation would affect the value of the shares will be a useful

practical method of deciding whether a fair minded observer might hold the relevant apprehension. In such a case, if the

answer to the question is in the negative, the judge is not disqualified. If the answer to the question is in the affirmative,

the judge is disqualified, not ‘automatically’, but because, in the absence of some countervailing consideration of

sufficient weight, a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind

to the resolution of the case.”

I would agree with the analysis insofar as it takes the approach of the reasonable person test rather than automatic disqualification.

38. In Ebner at p. 356 it was explained:-

“Having regard to the current state of the common law in Australia on the subject of disqualification for apprehended bias, we do not

accept the submission that there is a separate and free-standing rule of automatic disqualification which applies where a judge has a

direct pecuniary interest, however small, in the outcome of the case over which the judge is presiding. The principle of general

application earlier considered would have been sufficient (had it then existed) to cover the case of Dimes. For the reasons already

explained, a rule of automatic disqualification would be anomalous. It is in some respects too wide, and in other respects too narrow.

There is no reason in principle why it should be limited to interests that are pecuniary, or why, if it were so limited, it should be limited

to pecuniary interests that are direct. This is illustrated by the problem that concerned the House of Lords in Pinochet [No 2] (94).

The concept of interest is itself vague and uncertain. It is not logical to have one rule applying to disqualification for interest and a

different rule applying to disqualifi¬cation for association. A problem that has attended attempts to apply the rule has been whether,

notwithstanding the language in which it has been expressed, it is subject to a de minimis qualification.”

39. We apply, in our jurisprudence, a “reasonable person” test on the issue of objective bias, rather than an automatic disqualification

test. It does remain, of course, to consider what a “reasonable person” would consider would lead to objective bias. This requires to

be analysed on the facts of each case.

40. In Ebner the majority of the Court, inter alia, analysed the situation as follows, at p. 357:-

“The apprehension of bias principle requires articulation of the connection between the asserted interest and the

disposition of the cause which is alleged. If, on examination, the judge does have a financial interest in the outcome of

the litigation, the application of the apprehension of bias principle will lead to the judge being disqualified. By contrast,

where, as here, it is clear that the outcome of a case would have no bearing upon the value of the shares held by the

judge in the listed public company, and there is no other suggested form of pecuniary interest involved, then the judge

does not have a direct pecuniary interest in the outcome of the litigation.”

41. However, in that case Kirby J. dissented from the decision that the judge was not disqualified from delivering judgment. There

were two cases before the High Court, and Kirby J. pointed out that they presented to that Court the issue of the applicable legal

rule requiring disqualification of a judge for a pecuniary interest, in that case being shares in, or of real relevance to, a party to the

litigation before that judge. Kirby J. adhered to the automatic disqualification for pecuniary interest rule, established in Dimes. He

stated at p. 383:-

“Although it is impossible to be dogmatic, I take the common law principle which forbids a judge from having a pecuniary

interest, at least one involving a direct interest in a particular party, as a principle mainly concerned with upholding the

fundamental guarantee of judicial ‘independence’. I take the guarantee of ‘impartiality’ as one basically supported by the

common law principle of disqualification for apprehended bias as perceived by a reasonable bystander. The fact that there

are two basic notions expressed in human rights norms makes it unsurprising that over 150 years, the common law should

have evolved two principles of its own that to some extent overlap. This fact imposes a brake on any overly enthusiastic

reduction of the separate legal rules into a single overarching one.”

Kirby J. held, at p. 390:-

“In the result, I would adhere to the settled authority of this Court as most recently explained by Deane J. in Webb v The Queen

(293). There is a ‘special class’ of case where a judge is disqualified when he or she has ‘a direct pecuniary interest in the outcome of

the proceedings’ (294). That ‘special class’ includes all direct pecuniary interests. All other cases of disqualification fall to be decided

by reference to the principle of apprehended bias based on the reasonable impression of the hypothetical bystander. This has long

been the way the law in Australia has approached such questions. The approach should not be changed (295).

It is worth adding that, before the current recusal statute was enacted, the present law, borrowed in turn from Dimes, was adopted

and approved by the Supreme Court of the United States (296). That Court's approach was later reaffirmed (297). Those who litigate

in Australia are entitled to no lesser protection than has long been accorded by courts in England, the United States and New

Zealand. Having regard to their own longstanding practice, I do not believe that Australian judges would expect, or desire, the

abolition by this Court of such established legal doctrine.”

42. In discussing the de minimis exception, Kirby J. held at p. 391:-

“De minimis exception: But what of the suggestion, expounded by the present respondents, that to constitute an interest

large enough to give rise to disqualification, it should be essential to show that the ratio of the judge's shareholding to

the company's total issued capital was such that the judge's adjudication alight have affected his or her interest as a

shareholder (301)? This could well be an appropriate criterion if the matter to be judged were the possible response of the

reasonable bystander to the facts disclosed. But in my view, there is an anterior question of disqualification for pecuniary

interest. It is necessary to answer that question before considering any different or additional ground of disqualification

(302). It is in addressing that question that some authorities have been willing to concede a de minimis exception to

relieve the judge, the parties and the administration of justice of an automatic disqualification that would otherwise apply

(303).

In support of such an exception, it may be pointed out that Lord Cottenham's shareholding in the canal company, held to

disqualify him in Dimes, was a most ‘substantial’ one (304). Yet, whilst I would be prepared to accept a de minimis

exception to the special rule, the prophylactic purpose of the rule makes it important to reserve that exception to cases

that are truly de minimis and not simply cases of a small interest Thus, it would be wrong to infer from the facts in Dimes

that only a shareholding approaching one per cent of the issued capital of a company, or more, would attract

disqualification of the judicial shareholder. I would confine the exception to cases where the pecuniary interest in question

is so trivial and insubstantial that the suggestion of disqualification could be dismissed as absurd (305). Cases attracting

this exception would be few. They would ordinarily only arise where the judge had disclosed the trivial interest (306). If

the interest were discovered belatedly the exception would only apply where the oversight was excusable and the

injustice occasioned by a refusal to waive the interest was such an affront to commonsense, having regard to the trivial

size of the interest, so as to demand exception from the rule in the circumstances.

Indirect, remote and speculative interests excluded: Similarly, it is ¬appropriate to confine the principle, in the terms in

which Deane J stated it, to cases where the pecuniary interest in question is a ‘direct’ one (307). A judge is not expected

to stand aside where his or her interest in the subject matter of, or in a party to, the litigation (or that of a close family

member) is ‘indirect and attenuated’ (308) or ‘speculative’ (309).

The fact that a judge does not personally have shares in a litigant corporation will not necessarily render an interest

‘indirect’ if it is held by a close family member and its existence is known to the judge. In such a case, it is the usual

practice of judges in Australia to disclose such interests as are known, to place them on the record, and to seek waiver

of the judge's participation in the proceedings, which is ordinarily given. Even where the interests of close family members

are disclosed and no objection is taken, a judge may still regard it as necessary or desirable to decline participation (310).

This may be done notwithstanding that the decision occasion delay and unrecoverable costs. To hold that a judge is

disqualified only in the case of a substantial pecuniary interest, or one liable to be affected by the adjudication, misstates

the longstanding and strict common law rule. It also undermines the achievement of the purposes of that rule. I would

adhere to the established law (311).”

Declaration

43. In any consideration of the administration of law and the judiciary, the starting point is the declaration made by each judge on

appointment. Each person appointed a judge under the Constitution makes the following declaration:-

“In the presence of Almighty God, I, _____________ do solemnly and sincerely declare that I will duly and faithfully and to

the best of my knowledge and power execute the office of [judicial position] without fear or favour, affection or ill-will

towards any man, and that I will uphold the Constitution and the laws, may God direct and sustain me.”

Recusal

44. There is a well established tradition of recusal, amongst the judiciary, where a judge recuses him or herself from hearing a case.

This may be made by the judge independent of any application, or after an application that he or she recuse themselves. However, a

balance has to be struck and a prudent practice adopted. As Keane C.J. said in Rooney v. Minister for Agriculture and Food [2001] 2

I.L.R.M. 37 at pp. 40 to 41.

“Where one or other party does invite a judge to disqualify himself, the established and prudent practice has been for the

judge concerned to disqualify himself if he has any reservations about the matter. On the other hand a judge cannot

permit a scrupulous approach by him to be used to permit parties to engage in forum shopping under the guise of

challenging the partiality of the court.

The need to ensure the appearance, as well as the reality, of impartiality must be reconciled with the proper functioning

of the judicial system. The dilemma to which these conflicting demands give rise might be resolved in cases of difficulty by

the judge concerned referring the issue — perhaps on the basis of a memorandum prepared by him or her — to the senior

available judge of the court of which he is a member. Such a course would be acceptable in cases of particular difficulty

but I do not believe that this procedure should develop into common practice. The disclosure of possible grounds for

concern and the sensible reaction of the parties, advised by their lawyers, has usually been sufficient to dispose of any

such difficulty and I do not doubt this will continue to be the case.”

45. The issue of recusal was addressed also in Ebner v. Official Trustee in Bankruptcy (2000) 205 C.L.R. 337 at 348:-

“In a case of real doubt, it will often be prudent for a judge to decide not to sit in order to avoid the inconvenience that would result

if an appellate court were to take a different view of the matter of disqualification. However, if the mere making of an insubstantial

objection were sufficient to lead a judge to decline to hear or decide a case, the system would soon reach a stage where, for

practical purposes, individual parties could influence the composition of the bench. That would be intolerable.”

46. I considered the test for recusal in Bula Ltd v. Tara Mines Ltd (No. 6) 4 I.R. 412 at p. 449:

“A judge has a duty to sit and hear a case. However, in certain circumstances it is appropriate that he or she disqualify

himself or herself from a particular case.

The test is not whether that judge believes he or she would be impartial. Nor is it whether the judge or judges on a

motion to set aside such a judgment believes the judge was or would be impartial. Nor is it whether the parties consider

the judge impartial. The test is objective. This has been analysed by the Constitutional Court of South Africa: President of

the Republic of South Africa v. South African Rugby Football Union 1999 (4) S.A. 147 at para. 48:-

‘…the correct approach to this application for the recusal of members of this Court is objective and the onus of

establishing it rests upon the applicant. The question is whether a reasonable, objective and informed person would

on the correct facts reasonably apprehend that the judge has not or will not bring an impartial mind to bear on the

adjudication of the case, that is a mind open to persuasion by the evidence and the submissions of counsel. The

reasonableness of the apprehension must be assessed in the light of the oath of office taken by the judges to

administer justice without fear or favour, and their ability to carry out that oath by reason of their training and

experience. It must be assumed that they can disabuse their minds of any irrelevant personal beliefs or

predispositions. They must take into account the fact that they have a duty to sit in any case in which they are

not obliged to recuse themselves. At the same time, it must never be forgotten that an impartial judge is a

fundamental prerequisite for a fair trial and a judicial officer should not hesitate to recuse herself or himself if there

are reasonable grounds on the part of a litigant for apprehending that the judicial officer, for whatever reason, was

not or will not be impartial.’”

47. The tradition of recusal in the Irish Courts is reflected in the Bangalore Principles of Judicial Conduct 2002, at paragraph 2.5:-

“A judge shall disqualify himself or herself from participating in any proceedings in which the judge is unable to decide the

matter impartially or in which it may appear to a reasonable observer that the judge is unable to decide the matter

impartially. Such proceedings include, but are not limited to, instances where:

2.5.1 The judge has actual bias or prejudice concerning a party or personal knowledge of disputed evidentiary facts

concerning the proceedings;

2.5.2 The judge previously served as a lawyer or was a material witness in the matter in controversy; or

2.5.3 The judge, or a member of the judge’s family, has an economic interest in the outcome of the matter in

controversy;

provided that disqualification of a judge shall not be required if no other tribunal can be constituted to deal with the case

or, because of urgent circumstances, failure to act could lead to a serious miscarriage of justice.”

48. In the Commentary on The Bangalore Principles of Judicial Conduct (United Nations Office on Drugs and Crime, September 2007), it

was pointed out that a judiciary of undisputed integrity is the bedrock institution essential for ensuring compliance with democracy

and the rule of law.

49. In relation to the recusal principles cited above, there is some helpful commentary. In relation to “the reasonable observer”

reference was made to “a reasonable, fair-minded and informed person” who “might believe” that the judge is unable to decide the

matter impartially. The formulation in the Bangalore Principles “may appear to a reasonable observer”, was agreed upon at The Hague

meeting on November 2002, on the basis that “a reasonable observer” would be both fair-minded and informed.

50. The commentary also explained that consent of parties is irrelevant, stating:

“Even if the parties consent to a judge who feels he or she should be disqualified, the judge would not be justified in

continuing to preside over the case. This is because the public also have an interest in the manifestly impartial

administration of justice. Nevertheless, in most countries the parties are entitled to make a formal waiver on any issue of

impartiality. Such a waiver, if properly informed, will remove the objection to the disclosed basis of potential

disqualification.”

51. The commentary has made suggestions as to when a judge should make disclosure, as follows:-

“A judge should make disclosure on the record and invite submissions from the parties in two situations. First, if the judge

has any doubt about whether there are arguable grounds for disqualification. Second, if an unexpected issue arises

shortly before or during a proceeding. The judge’s request for submissions should emphasize that it is not the consent of

the parties or their advocates that is being sought but assistance on the question whether arguable grounds exist for

disqualification and whether, for example, in the circumstances, the doctrine of necessity applies. If there is real ground

for doubt, that doubt should ordinarily be resolved in favour of recusal.”

52. The commentary also suggests that a judge must ordinarily recuse himself or herself from any case in which the judge, or a

member of the judge’s family, is in a position to gain or lose financially from its resolution.

53. While the Bangalore Principles and Commentary go into some detail as to the principles underlining the exercise of recusal, the

test is that of the reasonable observer. The jurisprudence of this jurisdiction, the reasonable, objective and informed person, is

fundamentally consistent with the approach in the Bangalore Principles.

“Reasonable person” test relating to issue of bias

54. The test to be applied when considering the issue of perceived bias is objective. It is whether a reasonable person, in all the

circumstances of the case, would have a reasonable apprehension that there would not be a fair trial from an impartial judge. As it is

an objective test, it does not invoke the apprehension of a judge, or any party; it invokes the reasonable apprehension of a

reasonable person, who is in possession of all the relevant facts.

55. The test to be applied when considering issues of perceived bias is important in protecting the administration of justice, and

necessary to preserve public confidence in the judiciary. Thus, the issue is not simply a matter as between parties, but it is an issue

for consideration in relation to the manifest impartial administration of justice in the State, and the confidence which the people rest

in the judiciary.

Waiver

56. The issue was raised as to whether a litigant may waive a right of objection.

57. In Corrigan v. Irish Land Commission [1977] I.R. 317, at p. 324, Henchy J. stated:-

“I consider it to be settled law that, whatever may be the effect of the complaining party’s conduct after the impugned

decision has been given, if, with full knowledge of the facts alleged to constitute disqualification of a member of the

tribunal, he expressly or by implication acquiesces at the time in that member taking part in hearing and in the decision,

he will be held to have waived the objection on the ground of disqualification which he might otherwise have had.”

[Emphasis added]

58. However, in a dissenting judgment, Kenny J. stated, at p. 334:-

“It was argued by the counsel for the respondents that the appellant had waived the objection that the two

commissioners who signed the certificate were adjudicating on the objection. I am convinced that we should not hold that

there was a waiver. The basis of the rule that a person with prior knowledge of the facts should not sit to determine an

objection is one based upon public policy and not upon the rights of the parties. The Courts are concerned that their

reputation for impartiality should be preserved and they are equally interested in ensuring that administrative tribunals of

all types should observe the same standards. The matter was put concisely by Cave J in R v Fraser:- ‘The question was,

What would be likely to endanger the respect or diminish the confidence which it was desirable should exist in the

administration of justice?’ The Courts should enforce these rules in their control of all proceedings before inferior courts

and administrative tribunals. It is not competent for the parties to waive a rule of public policy.”

[Emphasis added]

59. In Delany, Judicial Review of Administrative Action, 2nd ed (Dublin: Round Hall, 2009) the author considers the issue of waiver at

p. 267

“This issue whether waiver should not be permitted on public policy grounds, on which the court was divided in Corrigan,

remains a point of contention. If one accepts the view expressed by Denham J in Dublin Well Woman Centre Ltd v Ireland

[199511 ILRM 408 that ‘the public perception of impartiality is a cornerstone of the administration of justice’ arguably

Kenny J was correct in the view which he put forward. As Goudkamp has suggested ‘private litigants should not be able to

sacrifice the public interest in maintaining the reality and appearance of justice because they find it expedient to do so’

((2007) 26 CJQ 310, 327. Toy Cronin has also suggested (2000-2003) 9 Auck UL Rev 850, 882 that ‘the doctrine of waiver

as applied to the rule against bias is an anachronism that should be abolished.’) While it is unlikely that waiver will be

established in a sufficient number of cases to seriously undermine confidence in the impartiality of the decision-making

process, it is nevertheless an important policy question which should be resolved. There is certainly merit in the

suggestion of Cooke P in Auckland Casino Ltd v Casino Control Authority [1995] 1 NZLR 142 that displays of blatant bias,

likely to undermine public confidence in the justice system, should not necessarily be capable of waiver. If this approach

were followed it might then be left to the reviewing court to decide whether the bias was sufficiently blatant to

undermine public confidence.”

60. In the circumstances of this case there was not sufficient disclosure on the 26th November, 2010, to allow for any consideration

of a waiver. Therefore, the possibility of a waiver did not, and does not, arise for decision.

61. When the issue is raised as to a perceived bias by a judge, the reasonable person test, as described in our jurisprudence, an

objective test, is the test to be applied. If a judge has a pecuniary interest in one of the parties to the case, then the best practice

is that the judge not hear the case.

62. However, in exceptional circumstances, where the interest declared is “trivial”, “insubstantial”, or that not to hear the case would

be “absurd”, a judge may proceed to hear a case. In such an approach it is not necessary to take a further step to establish that the

outcome of the decision to be made by the judge would have an impact on the price of the shares, or assets, which the judge owns,

or which his family own.

63. No burden rests on a party to establish, or counter argue, as to the value of the assets of the judge, and the effect on a

judgment. Such an approach would be contrary to the due administration of justice, and the principle that justice must be done and

be seen to be done.

Shares and Units

64. A distinction must be drawn between a situation where a judge himself or herself holds shares in a company, and a situation

where he or she has shares in units, in a pension fund, etc., where part of that fund contains shares, but over which he or she has

no control – indeed even knowledge. In the latter situation there is no reason for recusal, and there could be no perception of bias.

65. I would adopt and apply in this jurisdiction the Commentary on the Bangalore Principles of Judicial Conduct (United Nations Office

on Drugs and Crime, September 2007) at paragraph 99, which states:-

“An economic interest does not extend to any holdings or interests that a judge might have, for example, in mutual or

common investment funds, deposits a judge might maintain in financial institutions, mutual savings associations or credit

unions, or government securities owned by a judge, unless the proceedings could substantially affect the value of such

holdings or interests. Disqualification is also not required if a judge is merely a customer dealing in the ordinary course of

business with a bank, insurance company, credit card company, or the like that is a party to a case, without there being

pending any dispute or special transaction involving the judge. The fact that securities might be held by an educational,

charitable or civic organization in whose service a judge’s spouse, parent or child may serve as a director, officer, advisor,

or other participant does not, depending on the circumstances, mean that a judge has an economic interest in such an

organisation. Similarly, in cases involving financial implications that are highly contingent and remote at the time of the

decision, one would expect the application of the test generally not to result in disqualification. Nevertheless, in such

cases it may be prudent for the judge to notify the parties of any such circumstances and have the matter recorded in

open court so that the parties and not just the lawyers are made aware of them. Sometimes, lay clients are more

suspicious and less trusting than the judge’s professional colleagues.”

Conclusion

66. The test to apply when considering a recusal is that of the reasonable person.

The test to be applied when considering the issue of the perception of bias of a judge is the reasonable person test as described in

established jurisprudence.

67. A reasonable person would, in general, have a concern if a judge held shares himself or herself (not in a shares unit) in a company

which was a party in an action being heard by that judge.

68. Apart from being the “reasonable person” test, this approach is consistent with the long established maxim that no one should be

a judge in his own cause. It is also a fundamental building block of the principle that justice should not only be done but should be

seen to be done.

69. In analysing this issue of alleged perceived bias, it is a matter not only for the parties, or the trial judge, but there is the

fundamental concern for the manifest impartial administration of justice, and the confidence which the People rest in the judiciary.

Judicial impartiality is the fundamental principle upon which the administration of justice proceeds, upon which rests confidence in the

judiciary, and upon which rests the rule of law.

70. In this case the full facts were not before the Court, neither known to the judge nor to the parties on the 26th November, 2010.

No inquiry was made when the issue was raised.

71. It is the responsibility of a judge to make the necessary inquiries into his holdings of shares in a company which is in litigation

before him, and to inform the parties, so that an informed assessment may be made as to whether he or she should recuse himself or

herself. It is not a burden of inquiry to be borne by the parties. If a judge holds shares (as opposed to shares held in a pension plan or

units over which he or she has no control), then, in general, he or she should recuse himself or herself from hearing the action.

72. In this case the learned trial judge held the shares himself, they were not in a trust or any other type of fund. There was no

inquiry on the 26th November, 2010.

73. As the fundamental issues are so important, being the administration of justice and the allegation of objective bias, I have not

addressed the manner in which the information concerning the learned trial judge’s shareholding came ultimately before the Court.

74. In all the circumstances of the case, I would allow the appeal, and quash the three judgments identified in paragraph No. 3 of this

judgment, and remit the three matters back to the High Court to be heard by another judge of the High Court.