Judge's conduct questioned in second case

Embattled top judge Bill Wilson made no declaration in another case with greater potential for conflict of interest than the one that led to a Judicial Conduct Panel inquiry.

In this case, as well as being indirectly indebted to Alan Galbraith, QC, the judge and the company he and Mr Galbraith owned owed one of the parties, the Bank of New Zealand, more than $1 million.

Acting Attorney-General Judith Collins last month took the unprecedented step of appointing a panel to investigate further the judge's conduct regarding his disclosures to his Supreme Court colleagues about his business relationship with Mr Galbraith who appeared before him in the Court of Appeal case Saxmere v the Wool Board.

At the beginning of that case, the judge disclosed that counsel for the Wool Board, Mr Galbraith, was a friend and the pair shared horseracing interests (the detail of his disclosure is disputed).

It emerged 30 months later that the judge had contributed $242,804 less than Mr Galbraith to Rich Hill Ltd, their 50/50 owned company, and that the lawyer had signed company guarantees for loans taken out by the judge and Rich Hill.

Those loans were with the Bank of New Zealand.

In New Zealand Exchange v Bank of New Zealand and others, the involvement of the bank that lent money to the judge and Rich Hill is a second aspect to a possible conflict. It is understood that the opposing party was unaware of the banking connection.

In each instance, Justice Wilson was one of three judges who found in favour of Mr Galbraith's clients, the BNZ and the Wool Board.

It again raises the question of adequate disclosure.

A judicial contact told the Herald that bank debt was a grey area for judges. It would likely be a matter of fact and degree. Commercial loans might need to be disclosed when the bank is a party to a case because they are regularly reviewed by the bank, whereas many younger judges might have long-term home mortgages and see no reason to disclose that.

Auckland University associate law professor Bill Hodge said the BNZ case appeared to go beyond routine connections the public would not expect a judge to disclose.

"This is an institution to which [the judge] seems to be beholden ..."

The Guidelines For Judicial Conduct, written in 2003, say it is impossible to be categorical about relationships that give rise to disqualification but includes that:

* "The judge must be alert to any appearance of bias arising out of connections with litigants, witnesses or their legal counsel."

* "A judge should disqualify himself or herself whenever a party, lawyer [is] ... a close friend or business associate."

* "It is sensible for the judge to decline to sit in cases of doubt."

In his decision recommending a panel to further investigate complaints against Justice Wilson, Judicial Conduct Commissioner Sir David Gascoigne noted the judge had not made a disclosure in NZ Exchange v BNZ as the judge was confident that all counsel were aware of his business relationship with Mr Galbraith and did not see it as creating a conflict.

The BNZ case was heard a month before Saxmere filed for special leave to appeal (August 2008), first raising with the court the matter of an alleged conflict.

But Saxmere had earlier raised a possible conflict of interest in its complaint to the JCC (May 2008) and had notified the Prime Minister's office (June 2008).

In relation to the bank loans, Sir David said in his report: "In 2006, Justice Wilson consolidated and re-arranged his finances. As a part of that process, he repaid existing loans to the Bank of New Zealand, and took out a new loan in the sum of $900,000. At the time, the amount standing to his credit in his shareholder's current account with Rich Hill Ltd was in excess of that figure.

"The company agreed to give the bank a guarantee in respect of the judge's obligations under the loan.

"Mr Galbraith had no objection and he and the judge signed on behalf of the company.

"As they saw it, the judge was effectively borrowing on the security of his own money. Mr Galbraith did not personally guarantee Justice Wilson's indebtedness."

In June 2007, Rich Hill Ltd took out another bank loan - for which the judge and lawyer were guarantors - to fully fund a $720,000 land purchase, Sir David said.

Rich Hill Ltd held $3 million assets comprising a thoroughbred stud farm and racehorses. Justice Wilson sold his interest to Mr Galbraith in August after Saxmere alleged there was a conflict of interest.

In November the Supreme Court found that Justice Wilson "was beholden to Mr Galbraith" because of the imbalance in contributions to their company, which the court referred to as "a direct or indirect indebtedness from judge to counsel".

The court recalled its earlier ruling and sent the Saxmere case back for rehearing in the Court of Appeal.

THE PROCESS 'SHOULD RUN ITS COURSE'

Bill Wilson The Judicial Conduct Panel inquiry into Supreme Court judge Bill Wilson should go ahead despite the judge's intention to challenge its legality, says Auckland District Law Society president Anna Fitzgibbon.

Allowing the process to run its course was important to the public and the legal profession, Ms Fitzgibbon said in the society's newsletter, LawNews.

The main purpose of the Judicial Conduct Commissioner and Judicial Conduct Panel (set up in 2004) was to "enhance public confidence in, and to protect the impartiality and integrity of, the judicial system ..."

That required a "robust and open investigation process" and that had already been severely tested, she said.

Justice Wilson intends applying for a judicial review, arguing that matters identified by the JCC do not amount to a potentially sackable offence which is required before a panel can be appointed.

A judicial review would effectively require the High Court to determine the future of a judge who holds office in the highest court in the land, Ms Fitzgibbon said.

Justice Wilson obviously considered a panel hearing was unwarranted, she said. "However, wouldn't the more appropriate stance be for him to allow the panel to examine his conduct and provide its independent and impartial opinion. This would demonstrate to the New Zealand public that the judicial system is transparent and can be the subject of review ..."

The High Court said it expected to receive the judge's application next week. Justice Wilson has not been assigned to new cases since acting Attorney-General Judith Collins appointed a panel last month. It was announced this week that Court of Appeal president Sir William Young has been appointed a judge of the Supreme Court.

- Phil Taylor