Bernert v Absa Bank Ltd

Mr Bernert (applicant) designed a motor vehicle called "El Macho" and sought international financing through a business deal with Sheikh Fawaz Bin Abdullah Al-Khalifa (Sheikh) to build manufacturing plants. As a pre-condition for investment, the Sheikh required an undertaking from a reputable South African bank providing a fixed deposit facility. A document entitled "Verbiage of Bank Guarantee" (alleged guarantee) was prepared with assistance from Mr Coetzee, an Absa Bank business manager, on Absa Bank letterhead, addressed to Emirates Bank International. The document purported to guarantee a fixed deposit facility to Mr Fanjek for $6 million at a specified interest rate. When Absa Bank discovered the document, it advised Emirates Bank that it had been issued without authority and in irregular circumstances. The Sheikh withdrew from the investment project. The High Court found Absa Bank liable for negligent misstatement. On appeal, the Supreme Court of Appeal reversed this finding. One of the judges on the Supreme Court of Appeal panel, Cachalia JA, owned 1000 shares in Absa Bank (worth approximately R138,800 out of a total market capitalization of approximately R100 billion). This was disclosed before the hearing to the applicant's attorney, who did not object until after judgment was delivered against the applicant. Mr Bernert then alleged bias against the Supreme Court of Appeal.

• Whether a judge who holds shares in a litigant company should recuse himself or herself
• Whether prior association between judges and a litigant company creates a reasonable apprehension of bias
• Whether the manner in which a hearing was conducted gives rise to a reasonable apprehension of bias
• Whether factual findings by an appeal court so grossly unreasonable as to give rise to a reasonable apprehension of bias
• What is the test for reasonable apprehension of bias in South African law
• Whether a party who knows of grounds for recusal but waits until after an adverse judgment can raise bias
• The duty of judicial officers to disclose interests in litigants

1. The late filing of the application for leave to appeal and the record was condoned. 2. The applicant was granted leave to appeal. 3. The appeal was dismissed with costs, including costs of two counsel.

1. The test for reasonable apprehension of bias 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. 2. Where a judge owns shares in a litigant company, the test is whether there is a realistic possibility that the outcome of litigation would affect the value of the shares or the judge's interest in them. If there is no such realistic possibility, a reasonably informed person will not reasonably apprehend bias. 3. The nature, extent and value of shareholding are relevant considerations in assessing whether there is a realistic possibility of the outcome affecting the judge's interest and whether a reasonable apprehension of bias exists. 4. Even where shareholding is minimal and creates no realistic possibility of affecting the judge's interest, judges should disclose their interest to parties to maintain public confidence and avoid suspicion of concealment. 5. Prior association with an institution cannot form the basis of reasonable apprehension of bias unless the subject-matter of litigation arises from such associations or the judge acquired personal knowledge relevant to the case through such association. 6. A litigant who knows of facts giving rise to potential recusal cannot wait until after an adverse judgment to raise the issue. The interests of justice require that recusal applications be brought at the earliest opportunity. 7. Judicial conduct during hearings, including robust questioning, interventions, or displays of irritation or impatience, does not ordinarily give rise to reasonable apprehension of bias, though judicial officers should maintain courtesy and measured conduct befitting judicial office. 8. Mistakes on factual findings, even if incorrect, do not ordinarily give rise to reasonable apprehension of bias. Such mistakes will only create reasonable apprehension of bias if they are so out of kilter with the evidence as to be explicable only on grounds of bias. 9. The presumption of judicial impartiality and the double-requirement of reasonableness (both the person and the apprehension must be reasonable) place a formidable burden on a litigant alleging bias.

1. The Court observed that judicial officers should at all times be measured and courteous to those appearing before them, and that even where litigants or lawyers conduct themselves inappropriately and judicial censure is required, this should be done in a manner befitting judicial office. 2. The Court noted that it is fundamental to the judicial system that judicial officers are not only independent and impartial, but are seen to be independent and impartial, and that civility and courtesy should always prevail in courts. 3. The Court commented that litigants should leave courts with a sense that they were given a fair opportunity to present their case, as this is crucial to maintaining public confidence in the judicial system. 4. The Court observed that legal representatives should not stand by as spectators over what may convey an impression of bias but should raise objections as soon as reasonably practicable, allowing judicial officers to explain or correct their behavior. 5. The Court noted that appellate courts have an educational role towards lower courts and should guide them by pointing out errors and how they should be corrected, in a manner befitting judicial office, rather than describing judgments as "ill-considered." 6. The Court observed that the rule requiring appellate courts to defer to trial court factual findings should not be used to "tie the hands of appellate courts" but should assist rather than hamper appellate courts in doing justice. 7. The Court commented that robust debate in appellate courts may facilitate open-mindedness and bring clarity to difficult issues, and that well-informed litigants will know that appellate courts will engage counsel in ways that are often robust and may at times be overly so. 8. The Court warned that unsubstantiated accusations of bias undermine public confidence in the judicial system and imperil the rule of law, and that litigants should take care not to make such allegations without backing them up with evidence. 9. The Court noted that in a case of doubt about recusal, it will ordinarily be prudent for a judicial officer to recuse himself or herself to avoid inconvenience that could result if an appeal court takes a different view. 10. The Court observed that judicial officers should engage in a delicate balancing process between discouraging unfounded challenges to court composition and the pre-eminent value of public confidence in impartial adjudication of disputes.

This is the leading South African case on judicial bias arising from shareholding in a litigant company. It established important principles: 1. **Test for shareholding bias**: The court must ask whether there is a realistic possibility that the outcome of proceedings would affect the value of shares held by the judge or the judge's interest in those shares. If yes, the judge is disqualified (not by an automatic rule, but because a fair-minded observer might reasonably apprehend bias). If no, there is no disqualification. 2. **Duty of disclosure**: Even where shareholding is so minimal that there is no realistic possibility of affecting the judge's interest, judges should nevertheless disclose the nature, extent and value of their interest to avoid undermining public confidence. 3. **Timing principle**: Litigants who know of grounds for recusal must object at the earliest opportunity and cannot wait until after an adverse judgment to raise the issue. The controlling principle is the interests of justice, not waiver. 4. **High threshold for bias claims**: The judgment reinforces the high threshold for establishing reasonable apprehension of bias, emphasizing the presumption of judicial impartiality, the double-requirement of reasonableness, and the formidable burden on parties alleging bias. 5. **Conduct during hearings**: Provides guidance that robust judicial questioning, interventions, and even irritation or impatience do not ordinarily give rise to reasonable apprehension of bias, though judicial officers should always be courteous and measured. 6. **Factual findings**: Mere disagreement with factual findings, or even erroneous factual findings, do not establish bias unless the errors are so unreasonable as to be explicable only on grounds of bias. The case is significant for providing comprehensive guidance on recusal principles in the constitutional democracy, balancing the need to discourage unfounded challenges to judicial composition with the paramount value of public confidence in impartial adjudication. It is frequently cited in subsequent recusal applications and remains the authoritative statement of South African law on judicial bias.