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Tuesday, 29 April 1980
Page: 1925


Senator CARRICK (New South WalesMinister for National Development and Energy) - The Government is convinced that no case has been established which in any way suggests a breach of conduct by the Chief Justice and no case -


Senator Walsh - That is Barwick judgment.


The PRESIDENT - Order! Honourable senators listened in silence to Senator Evans. I demand silence now while the Leader of the Government is speaking.


Senator CARRICK -I repeat that the Government is completely convinced that no facts have been established to suggest any breach of conduct at all by the Chief Justice and no facts have been established to indicate that any inquiry of any kind should be held, much less -


Senator Walsh - Another cover-up.


The PRESIDENT - Order! I ask Senator Walsh to remain silent.


Senator CARRICK - No inquiry is necessary on the facts suggested, especially the kind of inquiry which has been suggested by Senator Evans in his motion. The fact is that we are talking about a gentleman whose reputation in Australia over a period of 50 years or more in the law is completely unsullied.


Senator Cavanagh - But it is challenged now.


The PRESIDENT - Order! I ask honourable senators to allow the Minister to speak. We had no interruptions when Senator Evans was making his speech.


Senator CARRICK - If honourable senators opposite want to set double standards, let them do so. We regarded this matter as being serious enough for us not only to hear Senator Evans in silence but also to give him an extension of time in which to speak. But if honourable senators opposite want to set double standards, it is for the public to judge their conduct. We are talking about a man who for more than 50 years has been pre-eminent in the law of this country, a man who led the Bar at the State and Federal level, a man of high distinction in the law, recognised not only in Australia but also internationally, a man who for some 16 years has been a very distinguished Chief Justice in this country, recognised internationally as such. That is the basic situation.

I pose one question, and let the public ask this question now: As the facts of all these matters have been available now for something like 30 years, why are they being raised now? It would have been possible for Senator Evans, or any of his colleagues, or anybody in public who wished to undertake a search, to have revealed the facts at any stage. The real question to be investigated is: For what purpose has this been done? As we are looking into the minds of fair-minded people, what is the motive? I repeat that in the whole of that time and significantly during the 16 years Sir Garfield Barwick has been Chief Justice, nobody has ever suggested that the man is not a man of massive integrity, of great objectivity of judgment and of impartiality. Those are the facts. The doors of the court rooms were open for people to come in and to make their challenges, as were the doors of the Press rooms, but challenges were not made.

What are the facts? The facts are that many years ago- some 30 or more years ago- like so many, perhaps most, lawyers particularly those who have been successful, Sir Garfield Barwick set out to protect his children during their lives, a decent, wholesome thing to do. He established a family company. That is not to be seen as something wrong; it is to be seen as a method of protecting one's family, a method which is availed of very widely in this community. It is a completely honourable, completely legal, completely wholesome and completely proper thing for any person, whether he be a parliamentarian or a judge, to do.

I shall now read to the Senate Sir Garfield Barwick 's letter, in which he describes those events. Then perhaps I will go on from there. Sir Garfield wrote to the Prime Minister (Mr Malcolm Fraser) in a letter dated 28 April:

My dear Prime Minister,

As publicity has been given to the affairs of Mundroola Pty Ltd, and as political advantage is obviously sought to be made of them and my former connection with them, you should know the following facts.

As a young man, I formed Mundroola Pty Ltd to benefit my two children, both during my lifetime and after my death. With the exception of a relatively small shareholding taken by my wife for a purpose which I will later mention, our two children have always been the sole proprietors, legally and beneficially, of the shares of the company and therefore of all its assets.

I have never had any proprietary interest, legal or beneficial, in the company or in any of its assets. I have never derived any income, nor any personal advantage in taxation, from the existence or the activities of the company.

With the assistance of Mr L. J. Thompson, a man of high repute in the business world, I managed and controlled the company's affairs during my children's minority and for some time thereafter. But the making of returns, including income tax returns, was left respectively to the solicitors and accountant employed by the company. The company was never a trading company and confined itself to investment in land and shares in companies.

As my son progressed in his legal studies, I progressively involved him in the management of the company's affairs and lessened my own participation therein. Consequently, for some years prior to 1974 I had ceased to be actively engaged in that management. I had decided that my son, in consultation with his sister and with the assistance of Mr Thompson, should completely take over that management.

In 1974 my attention was called to the fact that legally I retained control of the company. 1 then formalised the situation which had developed and resigned from the directorate of the company.

My wife remained as a shareholder and as a director so as to be available to arbitrate between the children in the event of their disagreement about the company's affairs. She has never actively participated in those affairs and has never had any need to act as arbiter between the children.

Since disconnecting myself from the active management of the company, I have not kept myself informed of the details of its activities and, in particular, of its share portfolio or its movements.

Mention has been made of my being a member of a Full Court deciding cases in which public companies were litigants in which Mundroola Pty Ltd held some shares. It is not suggested, I gather, that my views in any of these cases were in any wise influenced by the circumstance that my children, then adult, were entitled in their own right to shares in the companies concerned: but it is suggested that justice might not appear to have been done in those cases.

Justice is seen to be done if an informed and fair-minded person could not have honestly entertained doubt as to the impartiality of the judge. The identity of the judge, the nature of the issues in the case, the possible effect of their decision and, where shareholding is involved, the extent of the shareholding in question would no doubt all be included in the fair-minded person 's consideration. Further, in considering the possible effect of the decision of the case either way upon the rights of a shareholder it would be remembered that it is only in the market value of the shares and the extent of a dividend that the rights of a shareholder are likely to be affected.

I am certainly quite sure that no decision of mine has been in the least influenced by the fact that Mundroola Pty Ltd had any shares in companies in litigation before the court. I cannot and do not believe that a fair-minded person, knowing the facts as I have indicated them, would in all honesty have entertained any doubt of my impartiality in the resolution of an appeal, particularly an appeal involving, as mostly they do, matters of legal principle: that is to say, I feel sure that no informed and fair-minded person would have honestly thought that my views might have been influenced by the fact that my adult children beneficially owned shares in the litigant companies. 1 notice that reference is made in the press to the fact of my bankruptcy in the 1920's, no doubt hoping by the reference to discredit me in the public mind. In those circumstances, I may be permitted to refer to the facts of the matter, something which I have not heretofore troubled to do.

I had allowed a business run by my brother to be conducted in my name because he was then a minor. When the business failed I was legally liable for its debts. The principal creditors were three oil companies. I negotiated with them and asked for time to pay, undertaking to do so as promptly as I could. They refused and preferred to bankrupt me.

Notwithstanding the bankruptcy and my discharge from it, I fully paid out of my subsequent earnings all the creditors of the business and all my own creditors, including my bank, all the moneys formerly due to them, with the exception of the oil companies. I felt no moral obligation to make payment to them, having regard to their choice of my bankruptcy rather than the acceptance of my offer to pay.

You are at liberty to publish this letter or to use its information as you may see fit.

Yours sincerely. Garfield Barwick

The letter makes it perfectly clear that Sir Garfield Barwick, in fact as he said, 'never had any proprietary interest, legal or beneficial, in the company or in any of its assets' and 'never derived any income, nor any personal advantage in taxation, from the existence or the activities of the company'.

I turn to the suggestion that Sir Garfield sat in the High Court on cases in which companies in which his family company had a shareholding came before the High Court. Six such companies were named in the Press. It is fair to say that the corporations are Brambles, CSR and Ampol. To sum up the decisions, in four of the six cases the decisions went against the corporation concerned; in other words, the decisions went against the interests of the family company, however minor those interests might have been. A bench of five judges sat in all the cases, except one in which three judges sat. In five of the six cases the decision was unanimous. In the sixth case the decision was reached by a majority of four, including the Chief Justice, to one, Mr Justice Murphy. In all those cases, the vote of the Chief Justice had no influence at all upon the result.

Let me deal with the cases. The first was Brambles Constructions Pty Ltd v. Helmers in 1966. I pause to say that some 14 years have passed since then. The records of the companies have been available. It has been known that there is a family company called Mundroola Pty Ltd. It has been known that it had shareholdings. Nobody has sought to raise the matter until now. The real inquiry should be into the motives of those who are pursuing this matter at the moment. In 1966 a five-judge bench unanimously dismissed an appeal by Brambles concerning a claim for contribution made against it in respect of a personal injuries award. The case was argued in December 1965. Where could there be an interest by the Chief Justice or his family? The case was dismissed. The Commonwealth Sugar Refining Co. Ltd v. Dilley and others in 1967, some 13 years ago, is another case. A three-judge bench unanimously dismissed an appeal by CSR against an interpretation of the New South Wales company takeover legislation. Cullen v. Ampol Petroleum Ltd in 1971 was unreported but was noted in unreported decisions in 1971. This appeal heard by a five-judge bench, went unanimously against Ampol. It concerned a verdict of $105,000 damages against Ampol for malicious prosecution. In Brambles Holdings Ltd v. Pilkington in 1971-72 a five-judge bench unanimously upheld an appeal by Brambles against a conviction under the Traffic Act in Tasmania. The case concerned the freedom of interstate trade. In Whiting v. Brambles Industries Ltd in 1976 a five-judge bench unanimously allowed an appeal against Brambles. The case concerned workers' compensation. In Brambles Holdings Ltd v. Federal Commissioner of Taxation in 1977 a five-judge bench by a majority of four to one, Mr Justice Murphy dissenting, ruled in favour of Brambles.

These are the cases in which the Chief Justice is alleged by Senator Evans to have had a lack of impartiality. Yet, his judgments in the majority of these cases went against the interests of his family company. Let us turn to the statement of principles which might guide a reasonable person. As Senator Evans would know, in the banking case the then Dr Evatt, Q.C., sought to argue, as I recall, that two judges, Mr Justice Starke and Mr Justice Williams, should not sit because they had a pecuniary interest and may have had some bias in the case. This was a test case. The Chief Justice laid down principles. The wife of Mr Justice Starke held shares in the Bank of New South Wales. She held a pecuniary interest. Mr Justice Williams had a trusteeship.


Senator Button - How do you know about that?


Senator CARRICK - With the benefit of a little time and Senator Button 's patience I will read the judgment. It will, of course, be very telling in this situation. Mr Justice Williams was trustee for his sister in some banking shares. I will read from another case reported in the Queensland Law Reporter, which refers to the Latham case. It states:

This test was applied by the High Court in its ruling concerning the position of Mr Justice Starke and Mr Justice Williams in the Banks' Nationalisation case, reported sub nom.Bank of NSW v.The Commonwealth in ( 1948) 76 CLR 1, but not on this aspect. Lady Starke held shares in one of the plaintiff banks, but Mr Justice Starke had no interest in her shares; Mr Justice Williams was registered as a joint holder of shares in two of the plaintiff banks but he was only a bare trustee of them for his sister who lived abroad and he had no beneficial interest in them. The court's ruling was pronounced by Latham C.J. in arguendo, as follows- 'You draw a distinction, do you not- an actual pecuniary interest and embarrassment in hearing the case? For example, if there is any degree of pecuniary interest, however small, a Judge is disqualified from sitting. If, however, there is no pecuniary interest, then it becomes a matter of a question in all the circumstances of the case whether there is any degree of embarrassment which would prevent a fair trial. In neither of the cases mentioned is there any actual pecuniary interest- none. My learned brothers have said that they do not regard the existence of the facts stated as in any way affecting a fair and impartial consideration of the issues in the case. It appears to me that that has to bc accepted.'

By a pronouncement from a very distinguished Chief Justice a clear situation has been denned. That would have been in the knowledge of judges and the Chief Justice over the years. From memory, Sir Garfield Barwick appeared in the banking case. It would have been known quite clearly then that this principle had been established.


Senator Walsh - Disclosure.


Senator CARRICK - There is a murmur of disclosure'. This is not an argument that there ought to have been disclosure. The decision of the Chief Justice, Mr Justice Latham, in that case was quite clear. It said that if a wife held shares and had a pecuniary interest in a particular case that did not affect the impartiality or the conduct of the husband sitting in such a case. If a judge acted in trust for his sister who had shares that did not affect his impartiality. The situation was absolutely clear. I shall bring the matter up to date. 1 will read an opinion by the SolicitorGeneral of the. Commonwealth, Mr M. H. Byers, Q.C., dated 29 April.


Senator Button - Read it slowly, it is a very important opinion.


Senator CARRICK -I can understand that. It states:

Questions have been raised as to the propriety of the Chief Justice of Australia participating in decisions of the Full Bench of the High Court in a number of cases. The court decided legal questions in which one of the parties was a company shares in which were held by Mundroola Pty Ltd. The Chief Justice was a governing director and managing director of that company until approximately 1 974. He had no interest in Mundroola 's assets, although it seems that company owned the house he lived in. It is a family company formed and pursued in the interests of his children. Lady Barwick had a small shareholding in the company in order that she might act as arbiter should any difference arise between the children.

2.   No question of direct or indirect pecuniary interest arises. No actual bias is suggested. The only question is whether such facts establish that it might reasonably be suspected by fair-minded persons that the learned Judge might not resolve the questions before him with a fair and unprejudiced mind; Queen v. Watson ( 1976 1 36 C.L.R. 248 at page 264).

I think the answer to this question is clearly, no. I do not think that a fair-minded person would reasonably suspect that an unfair and prejudiced mind would be brought to bear on the resolution of the judicial questions because of the facts I have mentioned. Family companies are the means by which family investments are held and managed. The New Code of Judicial Conduct adopted by the American Bar Association in 1972 states that a Judge' may hold and manage investments including real estate but should not serve as an officer, director, manager or adviser of any business. The Bowen Report is to like effect.

It follows, therefore, that no question of bias arises.

It is signed 'M. H. Byers, Solicitor-General'. That is a very significant contribution. I turn to the report of the Bowen Committee of Inquiry into Public Duty and Private Interest. The Bowen Committee looked toward the holder of judicial office and asked whether there was a need to alter any of the rules that are available today. In paragraph 1 1.7 it concluded:

The Committee considered whether there was need for further rules, such as are contained in the Code of Judicial Conduct for United States judges, which was adopted in 1 973, or those adopted in the Ethics in Government Act of 1978, which require disclosure of income from non-judicial sources, receipts of gifts, and so forth. It concluded that there was no discernible need for such extension of the existing rules, which, in the Committee's opinion, render extremely unlikely the possibility that a conflict of interest involving a member of the federal judiciary might develop and would provide for resolution of the situation if it did.

The Bowen Committee said three main things. As to holders of judicial office, it stated:

Conflict of interest situations involving members of the federal judiciary are currently regulated by the criminal law, by legal doctrine and by convention.

The Crimes Act 1914, s. 34 (b), provides that 'any person who . . . being a judge or magistrate, wilfully and perversely exercises Federal jurisdiction in any matter in which he has a personal interest, shall be guilty of an offence'. The penalty for a breach is imprisonment for two years.

It hardly could be said that it has not been alleged that the Chief Justice wilfully and perversely exercised jurisdiction in a matter in such a way. The Committee went on:

It is now accepted that judges should not engage in business or in any way be associated with business institutions, for example as director, trustee or adviser. The law disqualifies a judge who has a pecuniary interest in one of the parties before the court, although it is accepted that the parties to a case can waive the disqualification. For example, a judge is disqualified if one of the parties is a company and he is a shareholder in it. In England, it has been assumed that the disqualification applies whether the shares are the judge 's personal holdings or those of his spouse. However, in the Bank Nationalisation case, where the wife of one judge held shares in one of the parties and another judge was joint holder of shares as a bare trustee for someone else, the judges were not disqualified. Judges tend to disqualify themselves in other cases, besides those involving financial interest, for example if as counsel they acted for one of the parties over a long period, or if, as parliamentarians, they were intimately involved with a matter which is now before the court and where embarrassment might be felt by the judge for objection taken by any party.

To understand the meaning of that one needs to look at other sections of the Bowen report. When it talks of engaging in business, it is very explicit about Ministers of the Crown. That statement, read in context with the report, certainly cannot be read as preventing a judge from being a director of a family company which holds land or a portfolio of shares. I suggest that the type of circumstance to which it is directed is that a judge should not, for instance, be involved in the daily conduct of a business which brings him into contact with members of the public; nor should he be a director, trustee or adviser of a corporation which carries on a business like a retail trading company, an insurance or trustee company, which have substantial dealings with the public. A judge who is merely the director of his family company which owns a portfolio of shares or land is not in this position. I do not think that sentence should be read as applying to such a judge. Certainly, if one goes to paragraph 8.25 of the Bowen report, where it lays down principles for Ministers, which undoubtedly will be equally salutary for judges, that interpretation of mine will come through.

What has happened is that a series of allegations have been made. It is extraordinary that Senator Evans, through his speech, made such comments as: 'It may be that the family company was quite properly conducted as a family investment. It may be that that is so'. I suggest that if that is his feeling, then to go on a witchhunt is an extraordinary thing to do, and one should look to the location of fair-minded persons. This sort of statement ran right through the speech of Senator Evans. I remind the Senate that Sir Garfield Barwick is a man very eminent in law who has had an absolutely unsullied reputation over a course of 50 years. There has been ample opportunity for people to raise questions of bias or of breaches of conduct over the years if they so desired. I have recited to honourable senators cases that have been quoted in the Press, ranging over something like 15 years, from 1966 onwards. In all these cases there were opportunities to raise these matters if people had wanted to.


Senator Evans - How was anyone to know about them? He did not disclose his interests.


Senator CARRICK - That is an interesting remark. Senator Evans asks how people were to know about them. They were to know about them by the same kind of ferreting in the decades gone by as has been found necessary for some self-interested reasons today- for exactly the same reasons. The ruling of Mr Justice Latham in the bank nationalisation case is a clear parallel to this matter and gives clear guidlines that Sir Garfield Barwick could act without any breach of conduct or embarrassment if his wife or family had interests in a particular corporation or matter in which he was involved. Here is a clear ruling.

It is fair to say that the Press, which has covered this matter very widely, has never made the slightest suggestion that there was any breach of impartiality by Sir Garfield Barwick, or that there has been any integrity. That should be recorded. The fact is that cases have been presented in the Press and there might have been an inference to those reading the reports that the judge sat in those cases and made self-interested judgments. An analysis of those cases shows that the very reverse is true- that in four out of six cases the judgments were adverse to those of the interests of his family company. In all cases the judgments were either unanimous or had a minority of one, and in no case was his decision the deciding judgment. I have referred to the Solicitor-General. He has been quite explicit in his opinion. He stated:

No question of direct or indirect pecuniary interests arises. No actual bias is suggested.

The Solicitor-General concluded that a fairminded person would think that it would be proper for the Chief Justice to act as he has. I have examined the Bowen Committee considerations and found that they are in parallel.

One has only to address the matters that Senator Evans has put forward, the statement which the Chief Justice has made, the opinion of the Solicitor-General and the evidence before us regarding the relevant cases to say that there is no evidence at all of any breach of conduct or ethics. There is no reason at all to consider that any reflection has been cast upon the reputation of one of Australia's greatest jurists, one of Australia 's greatest citizens. I can only regret that it has been necessary for some people to go on this journey. I ponder at the reason for it.







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