Goode v CRH: Judge must disclose full extent of any shares held in company in proceedings

lady-justice“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” Denham CJ [71].

Background

The defendants, CRH, John A Wood and Kilsaran Concrete, between them held a market dominant position for the supply of concrete within the greater Dublin area between 2007 and 2010. Goode Concrete claims that they were selling concrete at below cost during that period to its financial detriment and sought injunctions against the defendants pending a full trial on the main allegation. Proceedings in the High Court began in November 2010. At that time, the trial judge, Cooke J, informed the parties that “I have a vague feeling that a very small number of CRH shares feature somewhere in my pension fund”. Goode did not ask that the judge recuse himself. In January 2011, March 2012 and May 2012 Cooke J deliver three judgments in favour of the CRH. Goode appealed against all three judgments on grounds of objective bias.

In the Supreme Court, Goode introduced evidence that Cooke J held shares directly in CRH–not through his pension fund–that he purchased additional shares in CRH in December 2010 (by agents, without his knowledge) and that dividends were paid on shares in May 2012. In total the judge held €135,000 in CRH shares. Goode argued, among other things, that:

  • such an interest ought to result in an automatic disqualification of a judge or an automatic setting side of a judgment where one was delivered;
  • that the decisions should be set aside as a reasonable person would have a reasonable apprehension of bias;
  • that public policy would prohibit the waiving of a right that is for the public benefit;
  • that any waiver was nullified as the judge did not make a full disclosure of his interest; and,
  • that the facts of the case clearly require that the judgments be set aside.

CRH and Kilsaran argued that:

  • there is no rule for automatic disqualification of a judge for bias in Irish law;
  • the correct test is an objective one–Goode’s views are irrelevant;
  • that the reasonable person would consider the oath taken by judges, and, given the trial judge’s initial disclosure, would not suspect his interest influenced his decision;
  • that to establish bias, it must be shown that the trial judge’s decision could affect the share price in CRH, and given the size of CRH the judgments could not have done so–therefore the judge could not benefit from making a biased decision; and,
  • Goode had waived its right and was estopped form raising the issue of bias after judgent was given.

Denham CJ wrote the judgment for the majority (here). She reviewed the case law and held that there is no developed rule of law on automatic disqualification in Ireland [25]; that the test to be applied is the view of the reasonable person:

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.

Denham CJ also held that the issue of waiver did not arise in this case as the trial judge’s disclosure was insufficient [60], and that a distinction must be drawn between a situation where a judge holds shares in a company directly and where shares are held through a pension fund, etc., over which the judge has no direct control: where the judge has no direct control there could be no perception of bias and no reason for recusal [64]. As she believed the circumstances of the case would raise a reasonable apprehension of bias for a reasonable person, she allowed the appeal and set the three judgments aside. Clarke J, MacMenamin J (here) and Dunne J concurred.

Dissenting (here), Hardiman J said he believed the “allegation to be a contrivance, designed to get rid of three adverse decisions in the period 2010 – 2012. The appellants, Goode Concrete, could have appealed all or any of these decisions on their merits, within the time prescribed. They did not do so“. He said that he trial judge’s disclosure was in compliance with the law as it stood at the time; Goode could have sought additional information; the shareholding  was very small as a percentage of the overall stock issue; and shareholdings of a similar level have not been considered to disqualify judges in other common law jurisdictions.

Hardiman J said that there was a need for the presidents of the various courts to devise a code on when a judge should recuse themselves from a case, and that:

I believe that the result proposed in the judgment of the Chief Justice lays down new obligations on the judges of which they were not up to now aware and whose application, ex post facto is unfair both to the successful litigant in the present case and to the judge.

He believed that the law was correctly stated by Fennelly J in O’Callaghan v. Mahon [2008] 2 I.R. 514. 672:

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… the apprehensions of the actual affected party are not relevant.

Given the full circumstances of this case–the judge’s initial disclosure, that he had no knowledge of his actual interest in CRH and the size of his interest relation to the overall stock issue–Hardiman J did not believe that a reasonable person would apprehend bias. He would have dismissed the appeal.

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  1. Court to hear argument in a case alleging bias in Revenue’s investigation of tax avoidance | scoirl

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