Justice Terence Arnold and Queen's Counsel Stephen Mills took a sailing holiday together while Colin Craig's defamation case was being considered by the Supreme Court.
The barrister who consented to an opposing Queen's Counsel to go on holiday with a Supreme Court justice - while the judge was considering an appeal the lawyers were contesting - was placed in an awkward position, say three legal academics.
Failing to do so would risk insulting the judge and the law professors say any questions to be considered by the Supreme Court are about the process of handling any potential conflict of interest, not the personal integrity of the judge or lawyers involved.
Justice Terence Arnold was one of five Supreme Court judges who heard an appeal last September in the long-running defamation saga between Colin Craig, the former Conservative Party leader, and Jordan Williams.
Several months after the hearing, Craig's lawyer Stephen Mills, QC, called Williams' lawyer Peter McKnight to explain he was booked to go on a sailing trip with Justice Arnold over summer.
McKnight did not ask Mills to cancel the trip.
Then in April, the Supreme Court ruled in favour of Colin Craig and ordered a new trial be held.
The judges were split 3-2 with Justice Arnold sided with the majority.
While there is no suggestion Justice Arnold and Mills discussed the case while on holiday, Williams' legal team have taken the rare step of asking for the Supreme Court judgment to be "recalled".
When the Herald broke the story on Wednesday, Colin Craig said his lawyer had been professional in seeking approval from McKnight before going on holiday.
"In this particular case, Mr Mills took the very appropriate step of telling Mr Williams that [the holiday] had been planned and offering him the chance to say no," said Craig.
"He was offered that opportunity. If Mr Williams had concerns, he could have said no. But he didn't. I think that's quite professional [of Mr Mills]. I don't think Mr Mills can be criticised. He took Mr Williams at his word."
Williams and McKnight have declined to comment on why they gave consent to the holiday and raising concerns only now after an unfavourable outcome.
But three law professors told the Herald that McKnight was put into an "awkward" position when Mills sought his approval.
"It would be hard to say no, or you do have a problem," said Dr Bill Hodge of the University of Auckland.
"If you say no, what you are saying [to the judge] is 'I don't trust you, evenly unconsciously, to be unaffected by your relationship'. That's an insult and embarrassing to have to say it."
Andrew Geddis, professor of law at the University of Otago, said he did not believe seeking approval between parties was the best way to handle potential conflicts of interest.
"If you're waiting on the judgment, do you really want to say, or imply to that judge, I don't trust you to make a fair decision if you go off on this holiday?" said Geddis.
"To say nothing of, if you put the kibosh on a planned holiday, you're going to put the judge in a bad mood. Is that what you really want?
"I don't think we should be handling these problems is by saying, 'if the other side agrees with it, there's no problem'. It's too simplistic."
New Zealand is a small jurisdiction and everyone understands judges can be lifelong friends with senior counsel appearing in front of them, said Chris Gallavin, a law professor at Massey University.
He said the questions raised in this case are about the process, not personal integrity.
"You have to divorce the integrity of the individuals because of course they will say 'I wouldn't have an inappropriate conversation'. But actually, process matters," said Gallavin.
"Because if we don't get the process right, in the future, individuals without the same integrity might be swayed, of course they will say I'm of the utmost integrity, I wouldn't have those conversations."
This included how issues are raised and dealt with.
"A phone call to the other side saying ''Do you mind, do you have a problem with this?' inevitably puts the other person in an awkward position," said Gallavin.
"In recognition of how it's a difficult conversation, we have to do everything we possibly can to make it about the process and not the personalities."
While friendships between judges and lawyers are common in New Zealand's small legal world, the guidelines for judicial conduct state "care should be taken to avoid direct social contact with practitioners who are engaged in current cases before the judge".
"A judge may accept invitations to speak at law firms or barristers' chambers but should be careful to avoid any perception of a lack of impartiality," the rules state.
The rules for a judge to recuse themselves from cases where a potential conflict of interest may exist are not clear cut.
But the guiding principle is that a judge is disqualified from sitting on a case where "there is a real possibility that in the eyes of a fair-minded and fully informed observer the judge might not be impartial in reaching a decision".
This is the concept of "apparent bias" which the Supreme Court will grapple with in considering Williams' application for recall of the judgment.
"That is tricky," Geddis said "because you're trying to put yourselves in the shoes of this mythical person - the 'fair-minded observer - who is a creation the Court uses to work out whether the problem is bad enough to effectively undo the original decision."
Hodge quoted the leading English case on the impartiality and recusal of judges in which the Chief Justice said in 1924: "not only must Justice be done; it must also be seen to be done."
There were "two degrees of separation" in New Zealand and these relationships had to be managed with as much transparency as possible, said Hodge.
"These are all outstanding individuals. The concern is not that some terrible thing happened on that yacht, but that people will think 'oh my gosh, that member of the Supreme Court judged in favour of the person he just holidayed with'. The appearance doesn't look right."
The Supreme Court may not hold a hearing on the recall application, which would be open to the public, but decide the matter solely on the written submissions of both parties.
Craig and Williams have new lawyers for the application.
Defamation expert Julian Miles, QC, is representing Craig and Michael Reed, QC, - perhaps best known for successfully defending David Bain at his retrial - is Williams' new counsel.
One unanswered question is whether the holiday was known before the Supreme Court hearing last September, or whether the judgment was anticipated to be released before the trip.
In 2017, the former Chief Justice Dame Sian Elias released judicial guidelines about potential conflicts of interest.
Once an appeal to the Supreme Court has been sought, each judge has a duty to tell their judicial peers about any "known circumstances which may give rise to a concern among the litigants, or the public".
If, after discussing the matter with the other judges, the judge feels he or she cannot act impartially (or a fair-minded observer might reach that view), the judge is supposed to recuse themselves.
If the judge feels they can be impartial, they are supposed to issue a minute to the parties involved in the litigation to draw their attention to the circumstances and invite any concerns to be raised.
If an objection is made, a decision on whether or not the judge should stand aside will be made by the other Supreme Court judges.
The application to recall the Craig v Williams judgment will inevitably reignite debate around the social and business relationships between the judiciary and the bar.
Justice Bill Wilson resigned from the Supreme Court in 2010 following a controversy over his shared business interests with Alan Galbraith, QC.
Wilson, who was on the Court of Appeal at the time, was on the three-judge panel which heard an appeal case (Saxmere Company v Wool Board Disestablishment Company) in which Galbraith appeared for the Wool Board company.
The close friends were joint owners in a horse stud, which Saxmere was unaware of at the time.
Saxmere lost in the Court of Appeal, then appealed to the Supreme Court - to which Wilson had been promoted by this point - saying the judge should have withdrawn because of his links to Galbraith.
In July 2009, the Supreme Court rejected any apparent bias and found that "a fair-minded observer would not have had a reasonable apprehension of bias" arising from the personal and business (land and racehorse interests) relationship Justice Wilson had with
Mr Galbraith.
It was only after Saxmere came back to the Supreme Court a second time that - under direct questioning by his fellow judges - Wilson revealed Galbraith had advanced $242,804 more than Wilson into the company accounts.
"We are of the clear opinion that the objective lay observer could reasonably consider that ... the Judge was at the relevant time beholden to Mr Galbraith because of the imbalance, and that this might unconsciously affect the impartiality of the Judge's mind in
deciding a case in which Mr Galbraith was appearing," the Supreme Court said in October 2009.
As a result, for the first time, the Supreme Court recalled its judgment and sent the case back for re-hearing in the Court of Appeal.
Wilson later resigned in 2010 but has always denied any impropriety, or that the different balances in the ownership of the horse stud meant he was indebted to Galbraith.
"I did not owe Alan Galbraith a cent,'' he said in a 2011 interview with the Herald
on Sunday.
"I did not owe our jointly owned company a cent."
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