This has happened now, but I wanted to share this story in case it helps anyone in the future.

While I was waiting for my viva I got a request from a journal to review a paper that was written by my external examiner. It turns out that he is also an editor of that journal - coincidence? I think not.

This put me in a difficult position because I felt like it was a pre-viva test. Not in terms of having to give it a good review, but in terms of my comment quality being monitored very closely.

It took me about a week to thoroughly read the paper and draft my comments as I was so paranoid about what the reaction to them would be.

Should I have declined the request?

Personally I would have declined the request. Part of the peer-review system is that it is anon., so I am guessing that he might not have known that you were reviewing, even if he was the editor (if he submits a paper to said journal he has no power over its review to allow the peer-review to stand up to scrutiny). The reason you were likely selected is your expertise in the area, and its probably coincidental the timing. I'm suspecting he still has no idea you were a reviewer as long as you didn't disclose your identity.

My reasons for declining would be that of conflict of interest. You have a professional relationship to the individual, and given that he held a position of effectively power in relation to you there was always the danger of an accidental exposure which would compromise you. Sometimes its better not to take that risk, even though the notion of peer-review is meant to be biased or impartial.