Dimes v. Grand Junction Canal Proprietors (1852) 3 HL Cas 759
The Grand Junction Canal Proprietors brought a case against Dimes. The case was presided over by the Vice Chancellor, who gave judgement in favour of the Grand Junction Canal. Dimes appealed against this decision, and the appeal was heard by Lord Cottenham, the Lord Chancellor. He affirmed the judgement of the Vice Chancellor.
Dimes subsequently found that the Lord Chancellor was a shareholder in Grand Junction Canal Proprietors and appealed against the decision of the Lord Chancellor on the grounds that, by virtue of his pecuniary (or financial) interest in the respondent company, he should not have adjudicated the issue but should have recused himself.
Whether the Lord Chancellor’s decision was invalidated by virtue of his shareholding in Grand Junction Canal Proprietors
The judgement of a judge with a pecuniary interest in one of the parties, no matter how minimal, is invalid. The decision of the Lord Chancellor is therefore invalid.
Their lordships believed that the judgement of the Lord Chancellor should be set aside not because he was actually influenced by his pecuniary interest to be biased, but because of the importance of avoiding the appearance that he was influenced by his pecuniary interest. Per Lord Campbell,
No one can suppose that Lord Cottenham could be, in the remotest degree, influenced by the interest that he had in this concern; but, my Lords, it is of the last importance that the maxim that no man is to be a judge in his own cause should be held sacred. And that is not to be confined to a cause in which he is a party, but applies to a cause in which he has an interest. Since I have had the honour to be Chief Justice of the Court of Queen's Bench, we have again and again set aside proceedings in inferior tribunals because an individual, who had an interest in a cause, took a part in the decision. And it will have a most salutary influence on these tribunals when it is known that this high Court of last resort, in a case in which the Lord Chancellor of England had an interest, considered that his decree was on that account a decree not according to law, and was set aside. This will be a lesson to all inferior tribunals to take care not only that in their decrees they are not influenced by their personal interest, but to avoid the appearance of labouring under such an influence.
A key rule of natural justice is the rule against bias (nemo judex in causa sua), or the rule that no one should be a judge in his own cause. When a person has an interest in a case, he may be partial to protect the interest. When the interest is of a pecuniary or financial nature, irrespective of how minimal that interest is, the judge must recuse himself, or else his decision will be declared invalid.