The Supreme Court's decision last week to recall a decision it made earlier this year, and direct a new hearing of an important case because of concerns about the risk of the appearance of bias by one of its own judges, is unprecedented in New Zealand.
It not only raises doubts about the judgment of the judge involved but it also re-ignites debate made at the time the Supreme Court was established about whether, with judges drawn entirely from New Zealand's small legal talent pool, such problems are unavoidable. There is little question that, at the least, the episode is a serious embarrassment for the Supreme Court.
The Supreme Court's decision last week reversed one made in July. In that earlier decision, the court found that a business partnership between a judge who was at the time on the Court of Appeal, William Wilson, and counsel appearing before that court, Alan Galbraith, QC, in litigation involving wool growers was not sufficiently significant to raise any apprehension of bias in the case. In last week's decision, the Supreme Court reversed its view and sent the matter back to the Court of Appeal for a rehearing.
The Supreme Court changed its mind after hearing that the financial relationship between the judge and counsel was more significant than the judge had previously disclosed. In fact, the court found that the judge was beholden, as it put it, to Galbraith for $74,000, and perhaps more, in their joint business. The size of the liability, in the court's view, was "well above the level at which a direct or indirect indebtedness from judge to counsel could be regarded as so minimal as to be immaterial ..." The result, the Supreme Court said, was that an objective lay observer could reasonably consider that the impartiality of the judge's mind might unconsciously be affected by the situation.
That test – whether a reasonable objective observer could consider that a judge's impartiality might be affected by a connection in a case – is not new. It does not require a finding that the judge was in fact biased – and there has been no suggestion at any stage that Wilson was. The test merely asks whether there is an appearance that a risk of bias might arise. It is extraordinary that a judge of Wilson's calibre should not have recognised that his case transgressed the test.
The problem of the appointment of judges from a very small pool of legal talent, particularly commercial legal talent where most practitioners at the highest level know and often have ties with one another, is a long-standing one. It is one that all judges must be acutely sensitive to if public confidence in the integrity of the courts is to be maintained. Maintaining such confidence is particularly important now that there is no longer the backstop of a final appeal to the judges of the Privy Council in England.
At the time, the judge was a new appointee on the Court of Appeal. He was soon afterwards elevated to the Supreme Court, after an extremely short time on the Appeal Court and ahead of other more experienced and more intellectually distinguished Appeal Court judges. This lapse inevitably raises a question about whether he has sufficient sensitivity of judgment to entitle him to sit on the country's highest court.