Fuller v Fletcher Building Limited

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
GROUP PROCEEDINGS LIST

S ECI 2022 03433

GERALD FULLER	Plaintiff
v
FLETCHER BUILDING LIMITED (ARBN 096 046 936)	Defendant

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JUDGE:	Delany J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 and 10 October 2024
DATE OF RULING:	15 November 2024
CASE MAY BE CITED AS:	Fuller v Fletcher Building Limited
MEDIUM NEUTRAL CITATION:	[2024] VSC 712

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COURTS AND JUDGES – Application to disqualify for apparent bias – Usual practice not followed – Subpoena to produce documents in aid of application – Substantive application relies on disqualification by association, conduct and extraneous information - Judge to put forward matters on which the recusal application is to be determined and to determine the application based on that disclosure – Disclosure by the judge not evidence – Evidence not permitted on such an application – Discussion of difficulties if evidence and subpoenas were to be permitted – Attributes of the fair-minded lay observer – Observer has knowledge of the material objective facts – Observer not a lawyer – Observer will inform himself or herself to the extent necessary to make a fair judgement – Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, Webb v The Queen [1994] HCA 30, QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15, British American Tobacco Australia Services Ltd v Laurie (2011) 242 CLR 283, Attorney-General of New South Wales v Bar-Mordecai [2009] NSWSC 117, Australian National Industries v Spedley Securities (1992) 26 NSWLR 411, Barton v Walker [1979] 2 NSWLR 740, Zanatta v Cleary [1976] 1 NSWLR 230, applied – Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd (No 9) [1990] NSWSCA 154 – Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577, referred to, Hot Holdings Pty Ltd v Creasy (2002) 210 CLR 438, Austin BMI Pty Ltd v Deputy Premier [2023] QSC 095, Lawrie v Lawler [2015] NTSC 40, Environment Protection Authority v Maules Creek Coal Pty Ltd [2023] NSWLEC 94, R v Badenoch [2004] VSCA 95, discussed – Isbester v Knox City Council (2015) 255 CLR 135, Livesey v New South Wales Bar Association (1983) 151 CLR 288, Limbo v Little [1989] NTCA 5, DOQ17 v Australian Financial Security Authority (No 2) [2018] FCA 1270, Rajski v Scitec Corp Pty Ltd [1986] NSWCA 1, Dovade Pty Ltd v Westpac Banking Corporation [1998] NSWCA 70, cited – Australian Law Reform Commission, ‘Without Fear or Favour: Judicial Impartiality and the Law on Bias’ (2021), Polsen v Harrison [2021] NSWCA 23, Locabail (UK) Ltd v Bayfield Properties Ltd [2000] QB 451, CUR24 v Director of Public Prosecutions 83 NSWLR 385, Charisteas & Charisteas & Ors [2020] FCAFC 162, referred to.

PRACTICE AND PROCEDURE – Subpoenas for production – Procedure only available to secure production of a document ‘for evidence’ – Evidence not admissible on recusal application – Extensive affidavit evidence – Not demonstrated the documents sought will materially assist – Documents sought not potentially relevant – Subpoena set aside – Civil Procedure Act 2010 (Vic) ss 9, 19, 24 – Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 42A.01 – Warwryk v Mercedes-Benz Australia/Pacific Pty Ltd(subpoena ruling) [2024] VSC 120 – Volunteer Fire Brigade Victoria Inc v Country Fire Authority [2016] VSC 573 – Cargill Australia Ltd v Viterra Malt Pty Ltd (No 19) [2018] VSC 798, applied – Webb v Wheatley [2015] VSC 153, cited.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	William Edwards KC with Lara O’Rorke	Mayweathers
For the Defendant	Robert Craig KC with Roman Rozenberg	Herbert Smith Freehills
For Maurice Blackburn	Kane Loxley	Arnold Bloch Leibler

TABLE OF CONTENTS

The dispute.......................................................................................................................................... 1

The materials relied upon................................................................................................................ 4

Rule 42A............................................................................................................................................... 5

The subpoenas.................................................................................................................................... 9

Principles for apprehended bias................................................................................................... 11

The substantive grounds to be relied on..................................................................................... 15

The Association Ground............................................................................................................ 15
Disqualification by Conduct...................................................................................................... 20
Extraneous information.............................................................................................................. 22

The submissions............................................................................................................................... 23

The fair–minded and reasonably informed observer............................................................... 28

The judge the subject of the application is to determine the application............................ 31

The practicalities of a recusal application................................................................................... 33

On what basis is a recusal application to be determined?....................................................... 36

Is evidence admissible on a recusal application?...................................................................... 38

The recusal application in this case.............................................................................................. 48

Consideration.................................................................................................................................... 51

The subpoenas themselves............................................................................................................ 58

The first period............................................................................................................................ 60
The second period....................................................................................................................... 63
The third period.......................................................................................................................... 65

The document categories................................................................................................................ 69

Categories 2 & 3 of the first subpoena..................................................................................... 69
Category 4 of the first subpoena (summaries of time billed)............................................... 73
Category 5 of the first subpoena (time billing records)......................................................... 74
Category 6 of the first subpoena (2020 – 2023 communications)......................................... 76

The second subpoena...................................................................................................................... 78

Disposition........................................................................................................................................ 79

HIS HONOUR:

The dispute

This dispute involves an objection by the plaintiff and the recipient to two subpoenas issued by the defendant. What is unusual is that both subpoenas have been issued by the defendant in support of its application that the judge managing the proceeding should disqualify himself for apparent bias.

The proceeding is a class action in which the lead plaintiff alleges that by reason of the defendant’s conduct he and group members suffered loss or damage by acquiring shares in the defendant at a price higher than the shares would otherwise have traded on the market.

The plaintiff alleges that between 17 August 2016 and 23 October 2017 the defendant made representations about the performance and financial position of its buildings and interiors business and failed to disclose information concerning its true financial position, thereby inflating the value of its shares. It is alleged that in doing so the defendant engaged in conduct in contravention of the Corporations Act 2001 (Cth) (‘Corporations Act’), Australian Securities and Investments Commission Act 2001 (Cth), the Australian Consumer Law being Schedule 2 to the Competition and Consumer Act 2010 (Cth), Financial Conduct Act 2013 (NZ) and the Fair Trading Act 1986 (NZ).

The proceeding was commenced on 2 September 2022 and was allocated to the Commercial Court Group Proceedings List. Until June 2024 the proceeding was case managed by Nichols J, the judge in charge of that list. On 4 June 2024 the proceeding was reallocated to Watson J, a judge with extensive experience in class action litigation. The proceeding was listed for a case management conference before his Honour on 30 October 2024.

Pleadings have been completed. On 5 June 2024 Orders were made by consent requiring the defendant to give discovery to be completed by 25 September 2024.

On 8 July 2024 the defendant filed a summons seeking security for costs. That summons was initially returnable on 30 October 2024 before Watson J.

The Funding Information Summary Statement explaining to group members how the proceeding is funded states that the lead plaintiff, Mr Fuller, has entered into agreements with his solicitor, Mayweathers Pty Ltd (‘Mayweathers’), and a commercial litigation funder, CASL Funder Pty Ltd (ACN 645 229 643) (‘Funder’). The Funder has appointed CASL Management Pty Ltd (‘Manager’) to assist the Funder with services in respect of the management of the litigation funding of the proceeding. Agreements between the lead plaintiff, the Funder and the Manager provide that:

(a) The Funder has agreed to fund 75% of the reasonable fees of Mayweathers in running the proceeding (‘Lawyer’s Funded Fees’) and 100% of Mayweathers’ disbursement costs (‘Lawyer’s Disbursements’);

(b) The other or remaining 25% of lawyer’s fees are conditional upon a successful outcome (‘Lawyer’s Remaining Fees’). If the proceeding achieves a successful outcome, Mayweathers is entitled to its Lawyer’s Remaining Fees and an additional 25% of its Lawyer’s Remaining Fees for the risk Mayweathers has agreed to assume in prosecuting the proceeding; and

(c) The Funder will provide any security for costs that might be ordered by the Court, and pay any costs order made against the lead plaintiff and in favour of any defendant.

The Funding Information Summary Statement informs group members that if the class action is successful, such that the claims covered by the class action are resolved by way of a settlement or determined by a judgment which results in compensation being payable to the plaintiffs and group members (‘Claim Proceeds’):

(a) The Funder will seek approval from the Court to deduct from Claim Proceeds all fees and costs it has paid, such as the Lawyer’s Funded Fees, Lawyer’s Disbursements, and any adverse costs order expenses; and

(b) The Funder and Manager will each seek the Court’s approval to deduct an additional fee from Claim Proceeds to remunerate them for their respective roles in the proceeding.

On 5 September 2024 the defendant issued a summons seeking an order that Watson J recuse himself from the case management and hearing of the proceeding on the ground of apprehended bias or alternatively, for an order in the nature of prohibition. The recusal application was originally returnable on 30 October 2024 but is now listed to be heard by Watson J on 28 January 2025.

In submissions filed in relation to the subpoena dispute the defendant gave notice that at the hearing of the substantive application it will submit that a reasonable apprehension of bias arises for reasons that ’include’ the judge’s previous professional association when a partner of Maurice Blackburn Pty Ltd with Mr John Walker and entities related to him, including the Funder (referred to in the subpoena as the ‘Walker Entities’).

Both subpoenas are directed to Maurice Blackburn. Both rely on r 42A of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’) and require the production of documents to the Prothonotary.

In support of the subpoenas the defendant relies on a 45 page affidavit by its solicitor, Jason Betts, dated 3 September 2024 with a single exhibit of 2204 pages (‘the Betts affidavit’). The defendant also proposes to rely on the Betts affidavit in support of its substantive recusal application.

The Betts affidavit expressly states that no part of the defendants’ application is based on any assertion of actual bias.

The first subpoena was issued on 5 September 2024 (‘first subpoena’). It required the production of the documents specified by 13 September 2024.

Rules 42A.07 and 42A.08(1) of the Rules provide that an addressee or a party who has any objection to producing a document identified in the subpoena or to its being inspected shall notify the Prothonotary of that objection and state the grounds of that objection before the day specified in the subpoena.

Rule 42A.09(1) provides that upon receiving notice under r 42A.07 or r 42A.08, the Prothonotary shall refer the subpoena to a Judge or an Associate Judge for the hearing and determination of the objection.

On 12 September 2024 the plaintiff gave notice pursuant to r 42A.08(1) that it objected to the inspection of the documents to be produced in response to the first subpoena on the ground the documents are not relevant. He asserted that the subpoena lacks a legitimate forensic purpose and that the documents will not materially assist the defendant in respect of the issues arising for determination.

On 13 September 2024 the solicitors for Maurice Blackburn gave notice that their client objected to the production of documents in accordance with r 42A.07. The objection asserted that the first subpoena is an abuse of process and is oppressive.

On 30 September 2024 the defendant issued the second subpoena (‘second subpoena’). Both the plaintiff and Maurice Blackburn objected to the second subpoena.

The objections to the first and second subpoenas were referred to me for determination as the Commercial Court Duty Judge.

I have determined the objections should be upheld in relation to both the first and second subpoenas. The subpoenas should be set aside. The defendant should pay the costs of the plaintiff and of Maurice Blackburn relating to the subpoenas and the dispute concerning them.

The materials relied upon

The parties filed evidence and submissions and tendered correspondence upon which they rely:

(a) The affidavit of Jason Betts dated 3 September 2024;

(b) The affidavits of Jonathan Milner dated 26 September 2024 (‘Milner affidavit’) and 1 October 2024;

(c) The affidavits of Tracy Emma Tran dated 30 September 2024 and 9 October 2024;

(d) The affidavit of Bianca Kraljevic dated 1 October 2024;

(e) The plaintiff’s submissions dated 30 September 2024 and 17 October 2024;

(f) The defendant’s submissions dated 30 September 2024 and 21 October 2024;

(g) Maurice Blackburn Pty Ltd’s submissions dated 30 September 2024;

(h) Subpoena objection letter from Arnold Bloch Leibler dated 13 September 2024;

(i) Subpoena objection letters from Mayweathers dated 12 and 16 September 2024;

(j) Subpoena objection letter in response from Herbert Smith Freehills dated 25 September 2024;

(k) Bundle of correspondence passing between Herbert Smith Freehills and Arnold Bloch Leibler dated 4 October 2024 – 9 October 2024; and

(l) An agreed bundle of documents consisting of communications between the solicitors for the defendant and the Chambers of Watson J and the transcript of the mention before his Honour on 2 August 2024.

Rule 42A

When determining whether to set aside a subpoena issued pursuant to r 42A of the Rules it is necessary to consider the requirements of the rule itself, the general requirements applicable to subpoenas for the production of documents and the overarching purpose in the Civil Procedure Act (2010) Vic (‘CPA’).

Rule 42A.01(1) provides:

42A.01 Application
(1)This Order applies where a party who has a solicitor in the proceeding seeks to require a person not a party to produce any document for evidence before—
(a)the hearing of an interlocutory or other application in the proceeding; or

(b) the trial of the proceeding.

As appears from its terms, the r 42A procedure enables a party to serve a subpoena to compel a person who is not a party to produce any document ’for evidence’. As recently confirmed by Steffensen AsJ in Warwryk v Mercedes-Benz Australia/Pacific Pty Ltd(subpoena ruling), the phrase ‘for evidence’ means that a document sought under subpoena may potentially be required for evidence, either in–chief or in cross-examination.[1]
[1][2024] VSC 120 [12] (‘Warwryk v Mercedes-Benz’), citing Melbourne City Investments v Myer Holdings Ltd [2016] VSC 239 [44(d)] (Derham AsJ).

In Volunteer Fire Brigade Victoria Inc v Country Fire Authority, Forrest J made the following observations concerning the r 42A procedure:[2]
[2][2016] VSC 573 (‘Volunteer Fire Brigade’) [57]–[61].

The distinction between a subpoena issued under O 42A and discovery is important ... The obligation on the party subject to a subpoena has been considered in a number of decisions ... The leading decision is that of the NSW Court of Appeal in National Employers’ Mutual General Association Ltd v Waind and Hill:
…
There is also a point to be noted about subpoenas issued under O 42A, which was made by Kaye J in Newnham v Davies:
Subparagraph (1) of that rule specifically provides that the rule applies where a party seeks to require a person, not a party, to produce any document “for evidence” before the hearing of an interlocutory or other application in the proceeding, or before the trial of the proceeding. Thus, by its express terms the rule only authorises the issue of such a subpoena where the document, the subject of the subpoena, may potentially be admissible as evidence in the proceeding. Obviously, in order to be admissible, the document, of which production is sought, must have at least some potential relevance to the issues defined in the proceedings.

The words ‘may potentially be admissible’ are important. In coming to his conclusion, Kaye J cited Kennedy Taylor (Vic) Pty Ltd v Grocon Pty Ltd, in which Gillard J emphasised this qualification:
On a plain and literal interpretation of r42.10, aided by the definition and the forms, it is inescapable that the procedure under s42.10 is only available where the document is potentially required for evidence at the trial of a proceeding.
That is not to say that the procedure is not available if in the end result the document is not adduced into evidence but it is available to enable a party to inspect a document in order to make a decision whether or not to adduce it in evidence.

The purpose for the rule was also considered by Beach J in Belsart Pty Ltd v Man Po Holdings (Australia) Ltd. His Honour held that the rule was introduced to remove the inconvenience and injustice that could result from possible evidence produced on subpoena only being produced at trial. As the above authorities indicate, the real question is not ‘admissibility’ at large — which is determined at trial - but rather relevance.
It follows then that in determining whether documents are to be produced under subpoena pursuant to O 42A, a court must be satisfied that the documents sought to be produced are potentially relevant (in the sense of s 55 of the Evidence Act 2008 (Vic): ‘the evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding’). But this Court on an interlocutory application should go no further.

Concerning the specific requirements of r 42A, I proceed on the basis of the decisions in Warwryk v Mercedes-Benz,[3] Volunteer Fire Brigade and the authorities there referred to by Forrest J.
[3]Warwryk v Mercedes-Benz Australia/Pacific Pty Ltd(subpoena ruling) [2024] VSC 120.

Concerning the general requirements of an application to set aside a subpoena for the production of documents, I proceed on the basis of the following principles set out by Derham AsJ in Webb v Wheatley:[4]
[4][2015] VSC 153 [55]–[56] (citations omitted) (‘Webb v Wheatley’).

(a)It is necessary for the party at whose request the subpoena was issued to identify expressly and precisely the legitimate forensic purpose for which access to the documents is sought
(b)Except in cases where the subpoena is plainly too broad and merits the description of a fishing expedition, the judge should normally inspect the documents for the purpose of making a final decision as to whether a legitimate forensic purpose exists;
(c)However, the Court will not require production of subpoenaed documents, and will not permit access to subpoenaed documents, if the subpoena is expressed so broadly that the applicant cannot demonstrate, having identified a forensic purpose, that it is ‘on the cards’ (Alister v The Queen [1984] HCA 85; (1984) 154 CLR 404, 414) or that there is a ‘reasonable possibility’ (DPP v Selway (Ruling No 2) [2007] VSC 244; (2007) 16 VR 508, [10]) that the documents will materially assist the case of the party;
(d)A ‘fishing expedition’ is not a legitimate forensic purpose and will not be permitted ;
(e)The relevance of a document to the proceeding alone will not substantiate an assertion of legitimate forensic purpose. There is no legitimate forensic purpose if the party is seeking to obtain documents to see whether they may be of relevance or of assistance in his or her case;
(f)A mere assertion of bad faith by an applicant or that something might be found demonstrating bad faith is not enough — the criteria set out in (c) must be satisfied; and
(g)Where a party fails to demonstrate a legitimate forensic purpose, the court should refuse access to the documents and set aside the subpoena.

…it has been held in several cases that it is the duty of the court, where the issue is raised, to require the party calling on a subpoena to produce documents to identify expressly and precisely the legitimate forensic purpose for which access to the documents is sought and to refuse access unless such an identification is made.

In Cargill Australia Ltd v Viterra Malt Pty Ltd (No 19), Elliott J said, and the parties to this dispute agree, there is an obligation on the party seeking production to demonstrate that it is ‘on the cards’ or that there is a ‘reasonable possibility’ the documents sought will materially assist the case of the party issuing the subpoena.[5] That is because as Elliott J observed, ‘a legitimate forensic purpose will exist where based on the circumstances of the case, the documentation sought to be produced is not only relevant to the proceeding, but will materially assist in resolving an issue in dispute’.[6]
[5][2018] VSC 798 [27] (‘Cargill’).
[6]Cargill Australia Ltd v Viterra Malt Pty Ltd (No 19) [2018] VSC 798 [28].

When considering whether to set aside a subpoena the Court must have regard to the obligation imposed upon it by s 9 of the CPA to further the overarching purpose for which the CPA provides, namely ‘to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute’.[7] The overarching obligations in the CPA, which bind parties, legal practitioners and the providers of funding or financial support including litigation funders,[8] are also relevant. Those obligations include:
[7]Civil Procedure Act 2010 (Vic) s 7(1).
[8]Civil Procedure Act 2010 (Vic) s 10(1).

19Overarching obligation to only take steps to resolve or determine dispute

For the purpose of avoiding undue delay and expense, a person to whom the overarching obligations apply must not take any step in connection with any claim or response to any claim in a civil proceeding unless the person reasonably believes that the step is necessary to facilitate the resolution or determination of the proceeding.
…
24Overarching obligation to ensure costs are reasonable and proportionate

A person to whom the overarching obligations apply must use reasonable endeavours to ensure that legal costs and other costs incurred in connection with the civil proceeding are reasonable and proportionate to—
(a) the complexity or importance of the issues in dispute; and
(b) the amount in dispute.

The subpoenas

The first subpoena requires the production of the following:

…
2 Documents comprising:
a. costs agreements;
b.funding, co-funding and/or litigation management agreements;
c.law firm relationship agreements; and/or
d.legal retainer agreements
in relation to the Relevant Actions.

3.Documents containing tenders or proposals, or requests for tenders or proposals, in respect of the funding or management of the Relevant Actions.
4.Documents recording and/or summarising the total yearly or monthly time billed or recorded by Mr Andrew John Watson in relation to the Relevant Actions.
5.Documents recording and/or summarising billed or recorded time entries made by Mr Andrew John Watson in any of the Relevant Actions insofar as those time entries refer to Mr John Walker and/or CASL.
6.Documents comprising communications between Mr Andrew John Watson and Mr John Walker and/or CASL and/or ICP in the period between 1 January 2020 and 12 November 2023 making reference to:
a. the group known as “Keep Corporations Honest”;
b.the class action proceeding Lidgett v Downer EDI Limited S ECI 2923 01835;
c.any other Relevant Action; and/or
d.the terms of any commercial or other relationship between Maurice Blackburn and Mr John Walker and/or CASL and/or ICP.

The final category, category 6(d), is no longer pressed.

The first subpoena contains the following definitions:

‘CASL’ means any of CASL Group Pty Ltd ACN 645 222 546, CASL Funder Pty Ltd ACN 645 229 643 and CASL Management Pty Ltd ACN 645 229 116.
‘Documents’ has the same meaning under the Evidence Act 2008 (Vic) including but is not limited to the following:
(a) written records (including letters, memorandums, notes);
(b)electronic records (including emails, text messages, instant messaging chats and social media communications);
(c)digital files (including Word documents, PDFs, spreadsheets, presentations and databases);
(d)legal documents (including contracts and agreements);
(e)financial records (including invoices, receipts, ledgers, balance sheets); and/or
(f)business records (including meeting minutes, notes, plans).

‘ICP’ means any of Investor Claim Partner Pty Ltd ACN 611 462 027, ICP Funding Pty Ltd ACN 626 526 458, and ICP Capital Pty Ltd (deregistered) ACN 616 534 911.
‘IMF’ means Omni Bridgeway Limited ACN 067 298 088 formerly known as IMF Bentham Limited ACN 067 298 088, Bentham IMF Limited ACN 067 298 088 and IMF (Australia) Ltd ACN 067 298 088.
‘Maurice Blackburn’ means Maurice Blackburn Pty Ltd ACN 105 657 949 t/as Maurice Blackburn Lawyers.
‘Relevant Actions’ means the Relevant Commenced Actions and the Relevant Potential Actions.
‘Relevant Commenced Actions’ means all commenced proceedings in which Maurice Blackburn acted that were funded and/or managed by Mr John Walker and/or Walker Entities in the period between 1 November 2005 and 12 November 2023.
‘Relevant Potential Actions’ means potential or investigated (but not commenced) actions:
(a)proposed by Mr Andrew John Watson and/or Maurice Blackburn to Mr John Walker and/or Walker Entities; or
(b)proposed by Mr John Walker and/or Walker Entities to Mr Andrew John Watson and/or Maurice Blackburn

in the period between 1 November 2005 and 12 November 2023.
‘Walker Entities’ means:
(a) IMF, for the period between 1 November 2005 and 17 June 2015;
(b)ICP, for the period between 22 March 2016 and 12 November 2023; and/or
(c)CASL, for the period between 19 October 2020 and 12 November 2023.

The second subpoena seeks the production of:

Maurice Blackburn invoices in relation to the Relevant Actions which contain time entries of Mr Andrew John Watson.

The second subpoena contains the same definitions as the first subpoena.

Principles for apprehended bias

In order to determine what is relevant for the purposes of rule 42A.01, what might be required ’for evidence‘ and what might materially assist the defendant’s case, it is necessary to identify both the principles to be applied on an application for apprehended bias and to identify the grounds to be relied on by the defendant in its substantive application.

In QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs, Kiefel CJ and Gageler J referred to the well known ‘double might’ test for apprehended bias in Ebner v Official Trustee in Bankruptcy[9]:[10]

…the criterion for the determination of an apprehension of bias on the part of a judge was definitively stated in Ebner by reference to previous authority and has often been repeated. The criterion is whether “a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide”. The “double might” serves to emphasise that the criterion is concerned with “possibility (real and not remote), not probability”.

[9](2000) 205 CLR 337 (‘Ebner’).

[10][2023] HCA 15; (2023) 409 ALR 65, 77 [37] (citations omitted) (‘QYFM’).

In Ebner Gleeson CJ, McHugh, Gummow and Hayne JJ said:[11]

[The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an “interest” in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed.

[11]Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, 345 [8]. See also Polsen v Harrison [2021] NSWCA 23 [44].

In QYFM Kiefel CJ and Gageler J referred to the Ebner test as involving a distinct third step:[12]

Application of the criterion was identified in Ebner, and has been reiterated, logically to entail: (1) identification of the factor which it is said might lead a judge to resolve the question other than on its legal and factual merits; (2) articulation of the logical connection between that factor and the apprehended deviation from deciding that question on its merits; and (3) assessment of the reasonableness of that apprehension from the perspective of a fair-minded lay observer.

[12]QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; (2023) 409 ALR 65, 77 [38].

As Kiefel, Bell, Keane and Nettle JJ explained in Isbester v Knox City Council:[13]

The question whether a fair-minded lay observer might reasonably apprehend a lack of impartiality with respect to the decision to be made is largely a factual one, albeit one which it is necessary to consider in the legal, statutory and factual contexts in which the decision is made.

[13](2015) 255 CLR 135, 146 [20] (‘Isbester’).

In QYFM, Gordon J identified four critical aspects of the Ebner test:[14]

First, it is an objective test: it does not require a conclusion about the judge’s actual state of mind or an assertion of actual bias. The principle gives effect to the requirement that justice should both be done and be seen to be done.
Second, it is a test of possibility, not probability – whether the fair-minded lay observer might reasonably think that the judge might be biased. It has even been said that the fair-minded lay observer is generally taken to be mistaken because decision-makers will rarely be biased in the ways attributed to them, as the observer might have appreciated if fully apprised of the operation of a particular decision‑maker. That said, a finding of apprehended bias is “not to be reached lightly”. In determining whether an apprehension of bias arises, relevant considerations include “the legal, statutory and factual contexts in which the decision is made” and “the nature of the decision ..., what is involved in making the decision and the identity of the decision‑maker”.
Third, the test is not prescriptive about the ways in which a reasonable apprehension might arise. “The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty”. Indeed, the apprehension may not even be of a consciously impartial mind. The test encompasses apprehension of unconscious bias: “the hypothetical observer would recognise that judges are human, not a ‘passionless thinking machine’ or robot just assessing information”.
Fourth, the adjective “lay” in relation to the fair-minded observer is critical – “[i]t would defy logic and render nugatory the principle to imbue the hypothetical observer” with the knowledge and professional self-appreciation of a lawyer, let alone that of an experienced judge. The fair-minded lay observer is a member of the public because the principle is concerned with maintenance of public confidence in the justice system. “[I]t is the court’s view of the public’s view, not the court’s own view, which is determinative”.

[14]QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; (2023) 409 ALR 65, 83-84 [68]-[71] (citations omitted).

As was common ground in this case, as stated by the High Court in Livesey v The New South Wales Bar Association:[15]

[The] principle is that a judge should not sit to hear a case if in all the circumstances the parties or the public might entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the question involved in it.

[15](1983) 151 CLR 288, 293 [7] (Mason, Murphy, Brennan, Deane and Dawson JJ).

While not to understate the importance of the principle of apprehended bias, a judge has a duty to decide cases allocated to him or her. A judge should not disqualify himself or herself on the ground of bias or reasonable apprehension of bias unless ‘substantial grounds’ are established.[16] As Steward J said in QYFM:[17]

Whilst a judge must exercise prudence in deciding whether or not to sit in a given case, he or she also has a duty to decide cases allocated to him or her. That duty should not be displaced without good cause; it cannot be set aside because of merely superficial appearances. As Gleeson CJ, McHugh, Gummow and Hayne JJ observed in Ebner:
Judges have a duty to exercise their judicial functions when their jurisdiction is regularly invoked and they are assigned to cases in accordance with the practice which prevails in the court to which they belong. They do not select the cases they will hear, and they are not at liberty to decline to hear cases without good cause. Judges do not choose their cases; and litigants do not choose their judges. If one party to a case objects to a particular judge sitting, or continuing to sit, then that objection should not prevail unless it is based upon a substantial ground for contending that the judge is disqualified from hearing and deciding the case.

[16]Bienstein v Bienstein [2003] HCA 7; (2003) 195 ALR 225, 233 [36] (McHugh, Kirby and Callinan JJ), see also R v Watson; ex parte Armstrong (1976) 136 CLR 248, 262 and British American Tobacco Australia Services Limited v Laurie [2011] HCA 2; (2011) 242 CLR 283, 305 [45] (French CJ), 313–314 [71] (Gummow J).

[17]QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; (2023) 409 ALR 65, 121 [216] (citations omitted).

In QYFM, Jagot J made observations to similar effect:[18]

A judge who is subject to a reasonable apprehension of bias in respect of a matter is disqualified from deciding that matter. But a judge who is not so disqualified generally has a duty to hear and decide the matters assigned to that judge (referred to as the “duty to sit”). A further part of the judicial oath or affirmation is that the judge must “well and truly serve” the current sovereign, and their heirs and successors. Such service is performed by discharging the functions of judicial office. If, from a judge’s too ready acceptance of spurious or ill‑considered applications for disqualification for apprehended bias, a party could influence the constitution of the court, another source of apprehended bias would arise – a prospect which has been described as “intolerable”. Accordingly, judges are mindful that “[d]isqualification on trivial grounds creates an unnecessary burden on colleagues, parties and their legal advisers” and that they must “be careful to avoid giving encouragement to attempts by a party to use procedures for disqualification illegitimately, such as in an attempt to influence the composition of the bench or to cause delay”.
In applying the test for apprehended bias, with its “double might” components, a judge must be faithful to their judicial duty to discharge the functions of their judicial office. This duty to sit underlies such statements as that: (a) it “would be an abdication of judicial function” for a judge to adopt the approach that the judge will not sit if a party requests the judge not to do so on the ground of apprehended bias; (b) “[a]lthough it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit”; and (c) a conclusion of apprehended bias “must be firmly established and should not be reached lightly”.

[18]QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; (2023) 409 ALR 65, 136 [277]-[278] (citations omitted).

The observations by Jagot J about the unnecessary burden that can be imposed on the court, parties and their legal advisers as a result of disqualification when there is not a proper basis for that to occur align with objects stated in ss 9(1)(c) and (d) of the CPA. That is, to ensure the efficient conduct of the business of the court and the efficient use of judicial and administrative resources while recognising the object stated in s 9(1)(a), the just determination of the civil proceeding.

In Webb v The Queen, Deane J identified the four main categories of case where a judge might disqualify him or herself based on a reasonable apprehension of bias:[19]

The area covered by the doctrine of disqualification by reason of the appearance of bias encompasses at least four distinct, though sometimes overlapping, main categories of case. The first is disqualification by interest, that is to say, cases where some direct or indirect interest in the proceedings, whether pecuniary or otherwise, gives rise to a reasonable apprehension of prejudice, partiality or prejudgment. The second is disqualification by conduct, including published statements. That category consists of cases in which conduct, either in the course of, or outside, the proceedings, gives rise to such an apprehension of bias. The third category is disqualification by association. It will often overlap the first (e.g., a case where a dependent spouse or child has a direct pecuniary interest in the proceedings) and consists of cases where the apprehension of prejudgment or other bias results from some direct or indirect relationship, experience or contact with a person or persons interested in, or otherwise involved in, the proceedings. The fourth is disqualification by extraneous information. It will commonly overlap the third (e.g., a case where a judge is disqualified by reason of having heard some earlier case… and consists of cases where knowledge of some prejudicial but inadmissible fact or circumstance gives rise to the apprehension of bias.

[19][1994] HCA 30; (1994) 181 CLR 41, 74 (‘Webb v The Queen’) (citations omitted).

In this case, the primary ground relied on by the defendant is the third category in Webb v The Queen, disqualification by association. In addition, as clarified during the course of the hearing, the defendant intends to rely on the second category, disqualification by conduct, including by published statements and upon the fourth category, disqualification by extraneous information.

The substantive grounds to be relied on
The Association Ground

The defendant contends that the association between two individuals, the judge, Watson J, when he was a solicitor at Maurice Blackburn, and the person described by the defendant as the funder of the present proceeding, Mr Walker, provides the primary basis why Watson J should recuse himself. It submits:

the point is that what this kind of regime creates is a form of business relationship… where the lawyer, the funder and the manager are collectively investigating, instructing, prosecuting a case for their mutual financial return, and where that return is dependent upon the success of the action.

The Australian Institute of Judicial Administration’s Guide to Judicial Conduct[20] suggests that while current business associations may be grounds for disqualification, past professional association with counsel or arms-length relationships are unlikely to provide a compelling reason for disqualification.[21] While that may be so, as stated in Isbester, it is necessary in each case to consider the factual context.
[20]The Australasian Institute of Judicial Administration Inc, Guide to Judicial Conduct (3^rd ed, December 2023) 9 (‘Guide to Judicial Conduct’).
[21]Australian Law Reform Commission, ‘Without Fear or Favour: Judicial Impartiality and the Law on Bias’ — ALRC Report 138 (Report, 6 December 2021) 94–95 [3.38].

In Ebner the plurality held:[22]

It is not only association with a party to litigation that may be incompatible with the appearance of impartiality. There may be a disqualifying association with a party’s lawyer, or a witness, or some other person concerned with the case. In each case, however, the question must be how it is said that the existence of the “association” or “interest” might be thought (by the reasonable observer) possibly to divert the judge from deciding the case on its merits. As has been pointed out earlier, unless that connection is articulated, it cannot be seen whether the apprehension of bias principle applies. Similarly, the bare identification of an “association” will not suffice to answer the relevant question. Having a mortgage with a bank, or knowing a party's lawyer, may (and in many cases will) have no logical connection with the disposition of the case on its merits.

[22]Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, 350 [30].

In this case the association between the judge and Mr Walker is alleged to comprise a long-standing professional and business relationship of at least 18 years’ duration. The evidence of association in the Betts affidavit proposed to be relied on by the defendant focuses on three time periods: prior to 17 June 2015 when Mr Walker resigned from IMF (‘the first period’), March 2016 – October 2020 (the second period’) and 19 October 2020 - 31 October 2023 (‘the third period’).

The defendant alleges the relationship is one between a class action lawyer (via the law firm Maurice Blackburn) and class action funder/manager (via the Walker Entities). It submits the judge has conducted, participated in and overseen a commercial business relationship or venture with Mr Walker and the entities he has been a director of for their mutual financial benefit in the form of the receipt of significant legal fees, by way of ‘uplift’ and ‘contingent’ fees, as well as significant funder commissions or other entitlements.

The Walker Entities as defined in the subpoenas include the Funder and the Manager of the claims in this proceeding. The defendant submits that those entities together with Mr Walker have a significant economic interest in the decisions to be made in the proceeding. It submits that at each stage throughout the proceeding, the interests of the Funder and the Manager are directly and substantively tied to the decision of the Court. The defendant’s interests are juxtaposed as against those of the Funder at the security for costs stage, in the case of any adverse costs order, the outcome of the trial, the approval of any settlement, the entitlement to and amount of a deduction from Claim Proceeds and the making of a remuneration order, whether a Common Fund Order pursuant to s 33ZDA of the Supreme Court Act 1986 (Vic) or some other kind of order.

While the defendant submitted that through CASL Group Pty Ltd (‘CASL’) Mr Walker and his wife have an interest in over half the Claim Proceeds that might be recovered by the Funder and the Manager and in over half of the liabilities that may be ordered by the Court whether as security for costs or as a consequence of adverse costs orders, the defendant accepts that it is only Mr Walker’s interest in the CASL entities that is relevant and that the interest of Mr Walker’s wife can be put to one side.

Senior counsel for the defendant identified six matters to be relied on in support of the ground of disqualification based on association. It is convenient to consider each of those matters.

The first matter concerns the plaintiffs’ pleaded claim. Senior counsel referred to what he described as a pleaded allegation of dishonesty concerning alleged contraventions of s 1041E of the Corporations Act.

I do not accept that as an accurate characterisation of the pleaded case.

The amended statement of claim alleges the defendant contravened s 1041E(c)(ii) of the Corporations Act by making representations that were false in circumstances where the defendant ought reasonably to have known that the statement was false in a material particular or was materially misleading.

The pleading does not allege the defendant actually knew the representation was false or otherwise acted in a dishonest manner. The pleaded allegation is quite a different allegation to one which alleges a defendant knew the statement was false or, picking up the language of s 1041E(1)(c)(i), did not care whether the statement or information was true or false. No such allegation is made here.

The second matter relied on by the defendant is that the proceeding involves the Funder, the Manager and the lawyers’ fees being conditional upon a successful outcome with a 25% uplift on those fees contingent on the success of the litigation. The Funder has assumed the burden of providing certain funding for the legal work and meeting adverse costs orders and is the person who receives regular detailed reports about the legal costs. The Funder and the Manager give the day-to-day instructions for the conduct of the proceeding.

The first two matters referred to are established by reference to publicly disclosed information set out in the Group Proceeding Summary Statement and the Funding Information Summary Statement. The third matter appears from the Law Firm Relationship Agreement a redacted copy of which is exhibited to the Betts affidavit. The fourth matter, that day-to-day instructions are provided by the Manager as agent for the client, including any decisions necessary and incidental to commencing progressing resolving or settling the claims, appears from the Litigation Management and Funding Agreement (‘LMF Agreement’) between the Funder, the Manager and Mr Fuller dated September 2022, a redacted copy of which is exhibited to the Betts affidavit.

The third matter relied on in support of recusal based on association is that the Funder is responsible for providing security for costs. This appears from the redacted copy of the LMF Agreement exhibited to the Betts affidavit.

The fourth matter relied on is that the Court may be the arbiter of the security for costs obligation. While that is correct, the usual practice is that a contested security for costs application is heard by an Associate Justice of the Court rather than by the judge managing, or anticipated to hear the trial of the proceeding.

The fifth matter relied on in support of recusal is that if the class action is unsuccessful the Funder and the Manager have no entitlement to recover their costs or remuneration. Unless there is success, there is no return. The interests of the Funder and the Manager are also subject to determination by the Court concerning the amount of any award of damages which, if not sufficient or a poor result, may mean that one or other or both of the Funder and the plaintiffs’ solicitors would need to take a reduction in their fees. It is the Funder and the Manager who stand to gain the most from the litigation, at least as individuals, 18–33% of the Claim Proceeds according to the Funding Information Summary Statement. The exact percentage the Funder and the Manager will receive is subject to decision by the Court. The economic interests of the Manager and the Funder are tied both to the outcome of the litigation and to the Court as to ultimate remuneration.

Each of these propositions is correct. The contingent entitlement of the Funder and the Manager and the percentage range specified and the remuneration arrangements concerning Mayweathers is publicly available information. If there is an application for a Group Costs Order pursuant to s 33ZDA(1) of the Supreme Court Act 1986 (Vic) or an application to vary such an order pursuant to s 33ZDA(3) a judge other than the judge anticipated to be the trial judge will most likely hear such an application. That is because the judge hearing such an application may be provided with confidential information rendering it inappropriate for him or her to later hear the trial.

The sixth matter relied on by the defendant is that the Funder will need to seek approval from the Court for the deduction of an additional fee and remuneration for its role in the proceeding.

That statement is also correct. If a settlement is reached in the proceeding, particularly if settlement is reached proximate to trial, the usual practice is that a judge other than the anticipated trial judge will be the person to consider settlement approval. The settlement approval process will involve the judge hearing the application being provided with confidential information which would disqualify that judge from hearing the trial if he or she were to determine that approval should not be granted.

Disqualification by Conduct

The second ground to be relied on in support of the substantive recusal application is disqualification by conduct. In introductory remarks in its 2021 report titled ‘Without Fear or Favour: Judicial Impartiality and the Law on Bias’ the Australian Law Reform Commission (‘ALRC’) made the following observations concerning this category of apparent bias:[23]

This category can be broadly broken down into two subcategories:
·where the apprehension of bias arises from something the judge has previously done, or a decision the judge has previously made, that is said to give rise to an unacceptable risk of prejudgment, even if subconsciously; and
·where the judge does or says something during the course of proceedings that might indicate prejudice, partiality, or prejudgment, seen in the context of ordinary judicial practice.

[23]Australian Law Reform Commission, ‘Without Fear or Favour: Judicial Impartiality and the Law on Bias’ — ALRC Report 138 (Report, 6 December 2021) (‘ALRC Report’) 96 [3.42].

In this case the defendant relies on the first subcategory, although not in isolation from the association ground.

In Locabail (UK) Ltd v Bayfield Properties Ltd,[24] the Court of Appeal observed that claims of apparent bias will not ‘ordinarily’ succeed if based upon ‘extra-curricular utterances (whether in textbooks, lectures, speeches, articles, interviews, reports or responses to consultation papers)’.[25]
[24][2000] QB 451, 480 [25].
[25][2000] 1 All ER 65, 78.

The defendant submits one way the Court may deal with the recusal application is that even if the association between the individuals, the judge and Mr Walker, is not itself sufficient to engage the recusal principles, when looked at together with the statements considered cumulatively,[26] the reasonable, fair-minded observer might conclude that the judge might not decide the case on the merits.
[26]Polsen v Harrison [2021] NSWCA 23 [46].

It submits that in pursuit of the financial and commercial aims of their business relationship, the judge and Mr Walker separately and jointly advocated for their commercial interests and against measures or persons or organisations whose viewpoints or proposals might threaten or affect the viability of that model. In aid of the business relationship, targeted at the collective financial well-being of their organisations and indirectly themselves, the two men engaged in a form of public discourse directed to advancing their shared commercial aims. The depth of the association, the collective pursuit of class action success together on instructions from managers and funders and the strength of the rhetoric directed to those aims leads to the real and not remote possibility that in a class action involving litigation funding where potentially 18-33% of any recovery flows directly to the Funder, that Watson J may not decide security for costs, the case itself, Common Fund Orders, adverse costs and all other matters affecting the interests of his long-term business associate on their merits.

The defendant submitted that the clearest example of advocacy by the judge was his involvement in the Keep Corporations Honest industry group referred to in the Betts affidavit. That industry group was an association directed to advancing the interests of litigation funders and plaintiff class action law firms in which the judge and Mr Walker were involved.

The defendant drew attention to some of the public statements referred to in the Betts affidavit made by the judge prior to his appointment to the Court, statements including: ’class actions happen because companies break the law and cause significant losses for thousands of everyday Australians’, and ‘corporations use their power and size to hurt people’. It was submitted that the nature and content of the statements made by the judge before he was appointed is such that the reasonable fair-minded lay observer might think that he might not bring an independent mind to the issues in this case.

Section K of the Betts affidavit deals at length with statements and other matters proposed to be relied on to support these aspects of defendant’s recusal application. The first subsection is titled ‘joint views [with Mr Walker] or References in Publications’, the second subsection is titled ‘the 2020 Keep Corporations Honest Campaign’, the third subsection is titled ‘Publications in 2022’ and the fourth is titled ‘Other comments made by his Honour’. A large number of publicly available documents are extracted and discussed under these headings and various documents proposed to be relied on by the defendant in support of this ground for recusal are included in the voluminous exhibit to the affidavit.

Extraneous information

The fourth category in Webb v The Queen upon which the defendant proposes to rely consists of cases where knowledge of some prejudicial but inadmissible fact or circumstance gives rise to the relevant apprehension.

The defendant submits that by reason of his long association with Mr Walker, the judge understands CASL and Mr Walker’s preferences as to security for costs and through the judge’s dealings with CASL, its financial position. It submits that inside knowledge of the CASL business model, of the Funder and the Manager, and matters critical to their structuring of security for costs amounts to ‘extraneous information’ which might affect the disposition of an application for security for costs and which the judge could not put out of his mind in the sense described in Spincode Pty Ltd v Look Software Pty Ltd & Ors.[27]
[27](2001) 4 VR 501.

In support of this proposed ground the defendant intends to rely on the fact that when a solicitor at Maurice Blackburn in 2023, the judge made affidavits in the Downer EDI litigation in relation to a multiplicity/carriage dispute in those proceedings. In those affidavits, three of which are exhibited to the Betts affidavit, his Honour referred to his understanding of the financial resources of funders.

The facts concerning the Downer EDI litigation include that the law firm who joined Maurice Blackburn in the carriage of the consolidated class action was funded by CASL who continued as a joint funder of the consolidated proceedings.[28]
[28] Kajula Pty Ltd v Downer EDI [2024] VSCA 236; Lidgett v Downer EDI Ltd [2023] VSC 574, [9]–[12], [85] (‘Downer EDI litigation’).

The defendant submits that through the judge’s dealings with CASL when a solicitor in relation to the Downer EDI litigation, there would have been a process of negotiation and engagement about the provision of security for costs, adverse costs orders and the fees of the litigation that required some insight and understanding of CASL’s financial position.

The defendant submits that inside knowledge concerning the Walker Entities and CASL might be thought by the reasonable lay observer to give rise to a reasonable apprehension of bias.

The submissions

The plaintiff and Maurice Blackburn submit:

(a) the subpoena process may (theoretically) be available to an applicant in a recusal application, but whether such a subpoena can withstand an objection to it, or an application to set it aside, is another matter;

(b) whether a subpoena can withstand an objection, or application to set it aside, will turn on the alleged factual and legal basis for the recusal application, the terms of the subpoena, and the circumstances of the case (and must take into account the CPA);

(c) admissibility will turn on the Evidence Act 2008 (Vic), and be governed by relevance together with the discretionary exclusion under s 135;

(d) in this case the subpoenas lack a legitimate forensic purpose. They do not add to the Betts affidavit and it is unnecessary and irrelevant to explore the details underlying the nature of the alleged association;

(e) permitting the subpoenas to stand would result in production of inadmissible documents, or (at best) documents of such peripheral probative value that their tender would be excluded; and

(f) the subpoenas amount to a pre-trial process which is inconsistent with the overarching purpose under the CPA.

The plaintiff submits the fair-minded lay observer does not have ‘inside knowledge’ of the specific relationship between the judge and the Walker Entities. There is no need to prove the hypothetical observer’s knowledge of the matter beyond knowledge of the relationship which subsists. That is because the fair-minded lay observer is concerned with appearance rather than reality.[29]
[29]CUR24 v Director of Public Prosecutions [2012] NSWCA 65; (2012) 83 NSWLR 385 [39], [42]–[45] (Meagher JA).

The plaintiff submits the defendant is wrong to suggest that the fair-minded lay observer test requires the Court to examine ‘the nature of the association, the frequency of contact, and the nature of the interest of the person associated, with the decision maker’ by reference to material that is not known to the party asserting apprehended bias at the time it applies for recusal.

The plaintiff further submits it was wrong of the defendant to suggest that the fair-minded lay observer test requires the Court to ‘examine his Honour’s personal involvement in the Relevant Actions’ and to ‘determine his Honour’s closeness, involvement, and direct association with those matters that were funded, managed or the subject of instructions by Mr Walker or the Walker Entities’. The plaintiff submits those are matters that go to an allegation of actual bias, not apprehended bias.

The plaintiff and Maurice Blackburn rely on Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd[30] and Clenae Pty Ltd v Australia & New Zealand Banking Group Ltd.[31] In Raybos, Kirby P made the following observations: [32]

Reasonable citizens are not lawyers. Nor are they taken to be entirely ignorant of the legal system or unwilling to make at least a few superficial enquiries about the particular case. They will have neither the time nor the inclination to explore the facts at length. Their approach will involve the wielding of a broad brush. Sadly, in current social circumstances in Australia, the reasonable lay observer may even be a little cynical about our institutions, however undeserved that may be, for the judiciary faithfully performing its duties day by busy day. Therefore, when, in the present case, the critical decision must be made, it seems to me that it is to be made by reference to an impressionistic, and to some extent superficial, opinion based upon a consideration of the broad features of the allegation made. It is not made upon a detailed exploration of and lengthy rumination about the legal or other merits of it.

[30](No 9) [1990] NSWSCA 154 (‘Raybos’).

[31][1999] 2 VR 572 (‘Clenae’).

[32](No 9) [1990] NSWSCA 154 [21].

In Clenae, a case which predates Ebner, Winneke P warned about the effects of ‘judge shopping’ on public confidence in the administration of justice:[33]

If the disqualifying interest rule is to apply in the stringent form for which the appellants here contend, it is not difficult to foresee that its application in that form will give rise to undesirable practices which are just as subversive of the public’s confidence in the administration of justice as are the consequences which the appellants contend will flow from the broader formulation of the rule which I prefer. If a judge is bound to stand aside, upon objection, on account of holding a share interest in a party which could not possibly be affected by the outcome of the cause, then not only will inconvenience, cost and delay be occasioned to the parties but it will inevitably provide opportunities to parties to seek to avoid a hearing before judges whom they regard as possibly unfavourable to their cause. Furthermore, on this view, if the judge neglects, or fails for whatever reason, to disclose such an interest, his judgment will be liable to be set aside…

[33]Clenae Pty Ltd v Australia & New Zealand Banking Group Ltd [1999] 2 VR 572 577 [9].

Concerning the primary ground relied on for recusal Maurice Blackburn submits, and the defendant accepts, that apprehended bias will not be present unless it is possible to identify the critical nexus addressed by the High Court in Ebner, namely:[34]

…the question must be how it is said that the existence of the “association” or “interest” might be thought (by the reasonable observer) possibly to divert the judge from deciding the case on its merits.

Maurice Blackburn submits that the required nexus is unable to be satisfied in this case.

[34]Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, 350 [30].

In support of the subpoenas the defendant placed particular reliance on the observations by McHugh J in Hot Holdings Pty Ltd v Creasy that:[35]

…no conclusion of apprehended bias by association can be drawn until the court examines the nature of the association, the frequency of contact, and the nature of the interest of the person associated, with the decision-maker… Each case must turn on its own facts and circumstances.

[35](2002) 210 CLR 438 (‘Hot Holdings’) [74].

The defendant submits that the dates and extent of time entries (i.e. contact with Walker Entities) is relevant to the test of apprehended bias by association. The time entry records will materially assist the Court to examine the frequency of the personal contact between the judge and Mr Walker and his associated entities.[36] As observed by McHugh J, frequency of contact is a necessary consideration in the analysis of apprehended bias by association.
[36]Hot Holdings Pty Ltd v Creasy (2002) 210 CLR 438 [74].

While the defendant expects that the narrations in the time entry records may be subject to claims for legal professional privilege, it submits the dates and extent of the time entries will materially assist in further clarifying the frequency of contact and the extent of the relationship. It submits it would be antithetical to the interests of justice if the reasonable lay observer was confined in evaluating the association by reference only to publicly available information.

The obiter dicta observations by McHugh J in Hot Holdings have been picked up in later decisions[37] including in Austin BMI Pty Ltd v Deputy Premier where Freeburn J said:[38]

In invoking the device of the hypothetical fair‐minded observer, it is important not to jump to a characterisation of the process as “tainted”. A reasonable observer who knows some of the facts, but not others, might be suspicious about what had gone on.
…
And so, all the circumstances, including the nature of the association, the frequency of contact, the nature of the interest of the associated person, needs to be examined…

[37]Dik v Director of Professional Services Review [2024] FCA 370 (Raper J); Owners Corporation Plan No Rp 015268 v Yarra City Council (Appeal) [2023] VSC 778 (Gray J); HBMH v Commonwealth of Australia (No 2) [2024] FCA 8 (Feutrill J); Gabriel v Grech (No 4) [2020] NSWSC 726 (Adamson J); Greenwood v Winsor and Anor [2008] QSC 68 (Byrne SJA).

[38][2023] QSC 095 [161]–[163].

In support of the subpoenas the defendant referred to Polsen v Harrison where the New South Wales Court of Appeal identified a number of relevant propositions including concerning the fair-minded lay observer:[39]
[39][2021] NSWCA 23 [46] (citations omitted).

(vii)the fair-minded lay observer is presumed to approach the matter on the basis that ordinarily the judge will act so as to ensure both the appearance and the substance of impartiality, such that
(viii)the rebuttal of this presumption requires a “realistic possibility” of the apprehension of bias which is no “fanciful or extravagant” but is based on “the established facts” of the matter;

…
(x)the inquiry as to whether a judge might reasonably be apprehended to deviate from bringing an impartial mind to the resolution of a particular issue “requires no prediction about how the judge … will in fact approach the matter” and “admits of the possibility of human frailty”;

…
(xiv)there is to be attributed to the fair-minded observer a broad knowledge of the material objective facts as ascertained by the appellate court and the “actual circumstances of the case” as though the observer was sitting in the court;

…
(xvi)the context which must be considered includes the legal, statutory and factual context in which the decision is made, and “the totality of the circumstances”, although the fair minded lay observer will not be taken to have a detailed knowledge of the law or legal principles;

…
(xvii)the knowledge that the fair minded observer is taken to have is not limited to those facts and matters that were known at the time of an application for recusal and includes published statements made by the judge (whether prior, contemporaneous, or subsequent to the recusal application);

…
(xxii)the fair-minded lay observer will have regard to the cumulative effect of comments made by a judge and not to particular individual statements removed from their context;

The plaintiff submits the defendant is wrong to suggest, that the observations by McHugh J in Hot Holdings mean the defendant either has an onus or a right to prove the terms of, and frequency of contact arising within the asserted business relationship. When considered in context the statement by McHugh J does no more than confirm that a Court cannot find apprehended bias on the basis of one material objective fact known and relied upon by the party asserting apparent bias, while ignoring another material objective fact.

The plaintiff submits the enquiry is focused on the nature of the interest and not on its particular character, for example a shareholder in a company or parent/child. Once that interest is established, applying Ebner, there is no warrant to go fishing out other inside knowledge or facts. The apprehension arises from the nature of the relationship. The question is not whether the tribunal will in fact be biased, but ‘whether a reasonable man with no inside knowledge might well think that it might be biased’. [40]
[40]Hannam v Bradford Corporation [1970] 1 WLR 937, 949 (Cross LJ) cited in Livesey v New South Wales Bar Association (1983) 151 CLR 288.

Senior counsel for the defendant clarified during the hearing that as part of its recusal application the defendant relies on the ‘special knowledge’ ground.

Maurice Blackburn referred to ‘special knowledge’ in the apprehended bias context as being present where the judge may have gained knowledge about the facts of the case, including through privileged material in a brief as counsel, that may found a reasonable apprehension that as a judge he may have in mind extraneous material relevant to the case which is not known to one party.[41]
[41]British American Tobacco Australia Ltd v Gordon [2007] NSWSC 109 [85] cited in Kostov v Director of Public Prosecutions (NSW) (No 2) [2020] NSWCA 94 [38] (Bell P).

The fair–minded and reasonably informed observer

When considering whether a subpoena for the production of documents should be permitted on an application such as the present, and, if so, when considering whether the documents sought to be produced are both relevant and likely to materially assist it is critical to proceed by reference to the characteristics of the fair-minded and reasonably informed lay observer.

As all parties to the dispute accept, following the decision in Webb v The Queen, an application that a judge disqualify themselves for apparent bias is to be determined by reference to the conclusions that a fair–minded and reasonably informed observer might reach.[42] The plaintiff submitted, and the defendant accepted, that the test is:

whether a fair-minded lay observer with knowledge of the material objective facts might reasonably apprehend that the judge might not bring an impartial mind to one or more of the issues the judge is required to decide.
[emphasis in submissions]

[42]Webb v the Queen [1994] HCA 30; (1994) 181 CLR 41, 51–52 (Mason CJ and McHugh J), 57 (Brennan J), 67-68 (Deane J), 87-88 (Toohey J).

As Deane J observed in Webb v The Queen:[43]

While the question is not settled by any decision of the Court, it appears to me that the knowledge to be attributed to him or her is a broad knowledge of the material objective facts as ascertained by the appellate court as distinct from a detailed knowledge of the law or knowledge of the character or ability of the members of the relevant court. The material objective facts include, of course, any published statement, whether prior, contemporaneous or subsequent, of the person concerned. If, in the particular case, the proper conclusion is that a fair–minded lay observer with a broad knowledge of those facts would not entertain a reasonable apprehension of bias, that is the end of the issue of disqualification by reason of an appearance of bias. [emphasis added]

[43]Webb v the Queen [1994] HCA 30; (1994) 181 CLR 41, 73–74 (Deane J) (citations omitted).

In Raybos, Kirby P said the fair-minded observer is not a lawyer.[44] As earlier quoted, in QYFM Gordon J said:[45]

…the adjective “lay” in relation to the fair-minded observer is critical — “[i]t would defy logic and render nugatory the principle to imbue the hypothetical observer” with the knowledge and professional self-appreciation of a lawyer, let alone that of an experienced judge.

[44]Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd [No 9] [1990] NSWCA 154 [21].

[45]QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; (2023) 409 ALR 65, 84 [71] (Gordon J) (citations omitted), see also [197] (Steward J).

In Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd, Callinan J said:[46]

It is axiomatic that the perception of a lay observer will not be as informed as the perception of a lawyer, particularly a litigation lawyer. But the notional lay person should not be taken to be completely unaware of the way in which cases are brought to trial and tried.

[46](2006) 229 CLR 577, 635 [177].

While not a lawyer, the observer ‘is taken to understand the dynamics of modern judicial practice’[47] and will have knowledge of the docket system employed by many courts.[48]
[47]AJH Lawyers Pty Ltd v Careri (2011) 34 VR 236 [23] (Warren CJ, Hanson JA and Armond AJA); see also Bullmore v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2024] FCAFC 99, (2024) 304 FCR 370 [37] (Banks-Smith, Jackson and Feutrill JJ).
[48]Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577, 634–635 [173]–[175] (Callinan J).

As Kirby P said in Raybos, the lay observer ‘will have neither the time nor the inclination to explore the facts at length’.[49] The observer’s approach ‘will involve the wielding of a broad brush’.[50]
[49]Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd [No 9] [1990] NSWCA 154 [21].
[50]Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd [No 9] [1990] NSWCA 154 [21].

In Victoria v Psaila Ormiston J said the test ‘requires the observer to be informed, not with the knowledge of Queen’s Counsel, but at least with sufficient knowledge to make an informed appreciation of questions such as impartiality and the want of prejudice’.[51]
[51][1999] VSCA 193 [47].

In Thomson v ANZ Banking Group Ltd, faced with an application relying on multiple grounds including that she had failed to disclose any relationship with ANZ and certain legal firms, the primary judge refused to recuse herself. On appeal, concluding that the ground relating to the ANZ did not have merit, the Queensland Court of Appeal commented:[52]

An application of the test based on the attribution to the fair-minded observer does not include an approach predicated on a fishing expedition about what the judge might have by way bank accounts or mortgages, nor any such thing held by members of the judge’s family. To take that approach is to turn the fair-minded lay observer into a suspicious busybody, fishing for the unknown. That approach is unwarranted. No basis has been shown on the appeal as to why her Honour’s approach in this respect was not correct.

[52][2024] QCA 073 [95].

In British American Tobacco Australia Services Ltd v Laurie, French CJ referred to the earlier decision of the High Court in Johnson v Johnson,[53] where the plurality said:[54]

Whilst the fictional observer, by reference to whom the test is formulated, is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice. The rules and conventions governing such practice are not frozen in time. They develop to take account of the exigencies of modern litigation. At the trial level, modern judges, responding to a need for more active case management, intervene in the conduct of cases to an extent that may surprise a person who came to court expecting a judge to remain, until the moment of pronouncement of judgment, as inscrutable as the Sphinx.

[53](2000) 201 CLR 488 (‘Johnson v Johnson’).

[54][2011] HCA 2; (2011) 242 CLR 283, 305–306 [46] (‘British American Tobacco’) (citations omitted).

French CJ also referred to the observations made by Kirby J in Johnson v Johnson when discussing the attributes of the fictitious bystander his Honour said:[55]

Such a person is not a lawyer. Yet neither is he or she a person wholly uninformed and uninstructed about the law in general or the issue to be decided. Being reasonable and fair-minded, the bystander, before making a decision important to the parties and the community, would ordinarily be taken to have sought to be informed on at least the most basic considerations relevant to arriving at a conclusion founded on a fair understanding of all the relevant circumstances.

[55]British American Tobacco Australia Services Limited v Laurie [2011] HCA 2; (2011) 242 CLR 283, 306 [46] (citations omitted).

French CJ continued:[56]

A reasonable member of the public is neither complacent nor unduly sensitive or suspicious.
I agree with the observation of Kirby J that a fair-minded lay observer would, before forming a view about the existence of a reasonable apprehension of bias, take the trouble to inform himself or herself to the extent necessary to make a fair judgment.
[56]British American Tobacco Australia Services Limited v Laurie [2011] HCA 2; (2011) 242 CLR 283, 306 [46]–[47].

The judge the subject of the application is to determine the application

While it is the Court’s view of the public’s view, that of the fair-minded lay observer, not the Court’s own view that is determinative,[57] it is for the judge asked to recuse him or herself to determine the public’s view.
[57]Webb v the Queen [1994] HCA 30; (1994) 181 CLR 41, 52 (Mason CJ and McHugh J).

In Ebner, Callinan J expressed his preference that a decision on a recusal application be made by another judge.[58] Gleeson CJ, McHugh, Gummow and Hayne JJ did not agree.[59] Their Honours said that the trial judge who had dealt with the application himself:[60]

adopted what was both the ordinary, and the correct, practice in deciding the matter himself.

[58]Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, 691 [185].

[59]Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, 361 [74].

[60]Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, 361 [74].

The ordinary and correct practice to which their Honours referred has not changed in the 24 years since Ebner.[61] It remains that it is for judges at first instance to hear and determine allegations of bias raised against themselves. As Kiefel CJ and Gageler J explained in QYFM, that is because at first instance, the judge who is the target of the objection constitutes the court.[62]
[61]QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; (2023) 409 ALR 65, 88-89 [88] (Gordon J).
[62]QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; (2023) 409 ALR 65, 75–76 [30] (Kiefel CJ and Gageler J) citing Mason, ‘Judicial Disqualification for Bias or Apprehended Bias and the Problem of Appellate Review’ (1998) 1 Constitutional Law & Policy Review 21, 24.

The ‘ordinary and correct’ practice extends to cases in intermediate appellate courts where there is an application to disqualify one of the members of the court for apparent bias.[63]
[63]QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; (2023) 409 ALR 65, 97 [123] (Edelman J) citing Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, 361, [74] (Gleeson CJ, McHugh, Gummow and Hayne JJ).

In QYFM, in what Edelman J described as ‘seriously considered obiter dicta’[64] a majority of the High Court, consisting of Gordon, Edelman, Steward and Jagot JJ, expressed the view that in the case of a judge sitting as part of a multi–member court, prior to consideration by the court as a whole, consistent with their ethical duties, the judge asked to excuse themselves should have the first opportunity to determine whether or not to do so.[65]
[64]QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; (2023) 409 ALR 65, 94 [110].
[65]QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; (2023) 409 ALR 65, 93 [108], 97 [123].

Between 31 July 2023 and 25 August 2023, in his capacity as a principal of Maurice Blackburn, the judge made a series of affidavits in support of the consolidated parties’ position in the carriage dispute. The judge made those affidavits as head of Maurice Blackburn’s national class action practice. His affidavits described him as a director of Claims Funding Australia Pty Ltd, a litigation funder wholly owned by Maurice Blackburn which provides funding in matters in which lawyers other than Maurice Blackburn act for the funded litigants. The judge’s affidavits described him as the person with ‘senior oversight’ of the Lidgett proceeding on behalf of the plaintiffs. Another principal of Maurice Blackburn, Mr Schimmel was described as the person having the day to day care and conduct of the Lidgett proceeding.

An extract from the judge’s 25 August 2023 affidavit forms part of the Betts affidavit and copies of two further affidavits made by the judge are included in the exhibit to the Betts affidavit.

In his 31 July 2023 affidavit the judge gave evidence that between November 2004 and July 2023 he had conducted, assisted in or supervised approximately 75 representative (class action) proceedings on behalf of plaintiffs or applicants. He also said:

I am also closely familiar with, and regularly involved in, decision making and financial modelling in relation to MB’s class action portfolio and CFA’s litigation funding portfolio, including the range of commercial, financial, strategic and other considerations involved in selecting, prosecuting and settling group proceedings.

In his 21 August affidavit the judge gave evidence that it was proposed the conduct of the consolidated proceeding would be managed by Maurice Blackburn and CASL in accordance with various agreements. He said:

As to role of the funder CASL, John Walker has been involved in funding class actions in Australia for more than 20 years, including when he worked at the litigation funder now known as Omni Bridgeway. Mr Schimmel and I (and others at MB) have worked with him on a number of class actions over the past 20 years. I am confident that his experience in class actions, including consolidated proceedings, will mean that MB and CASL will have a good working relationship in this case.

In his 25 August 2023 affidavit, the judge gave evidence that agreement was reached to the joint funding of the consolidated proceeding including on the basis that CASL and Maurice Blackburn would each contribute to the funding of disbursements with CASL paying 65% and Maurice Blackburn paying 35%. In addition, Maurice Blackburn and CASL would each pay half the premium for a policy of insurance policy for adverse costs.

The affidavits made by the judge when he was a principal at Maurice Blackburn exhibited to the Betts affidavit do not refer to communications between the judge and Mr Walker or to any involvement by the judge with Mr Walker in negotiations concerning the consolidation or the funding arrangements for the conduct of the consolidated proceedings. There was no occasion for the affidavits to disclose or deal with such matters.

If disclosure is appropriate having regard to the authorities, including for example disclosure of whether there were direct communications between the judge and Mr Walker in connection with or concerning funding or consolidation of the Lidgett proceeding or the consolidated proceeding, those matters can be the subject of disclosure by the judge in accordance with the usual practice. Beyond those matters, I do not consider the observer would delve.

It is not relevant and nor is it material to the fair-minded lay observer to be aware of or to take into account various costs and funding agreements concerning the Downer EDI litigation. If it were relevant for the observer to do so, publicly available redacted copies of the agreements already form part of the exhibit to the Betts affidavit. To the extent the agreements are redacted those parts that are redacted are likely to remain commercially sensitive in light of the ongoing nature of the Downer EDI litigation.

The observer will not be interested in copies of documents redacted for commercial sensitivity. Nor will the observer be interested in documents redacted for legal professional privilege as would inevitably be the case if timesheet entries were required to be produced on subpoena .

The observer does not spend hours and days pouring over timesheets in order to apply the Ebner test. The observer is not aware of and does not take into account time entries of the judge when he was at Maurice Blackburn in relation to this third time period or the Downer EDI litigation when deciding whether the judge should disqualify himself for apparent bias on either of the two bases for which the Downer EDI litigation is said to be relevant.

To the extent documents or information may have come to the judge’s attention when he was at Maurice Blackburn that would constitute ‘special information’ relating to CASL, and any such matters as his Honour considers relevant can be disclosed by his Honour.

The further category of documents sought by the first subpoena relates to the group known as ‘Keep Corporations Honest’. Given the large volume of material exhibited and the matters dealt with in section K of the Betts affidavit, such other documents or communications as might exist in relation that group in the period between 1 January 2020 and 12 November 2023 could not be said to materially assist the defendant to establish its case for recusal based on conduct.

As a separate matter, the costs of compliance with the subpoenas need to be viewed in the context of the existing affidavit evidence. That is, to determine whether the costs are reasonable and proportionate to the recusal application.

Looking at the two subpoenas in light of the extensive evidence in the Betts affidavit and exhibit and the further factual matters concerning past actions in the Milner affidavit, what would be required to comply with the subpoenas as later narrowed by the defendant is not consistent with the overarching obligation in s 24 of the CPA. Namely, the obligation to keep costs reasonable and proportionate.

Section C of the Milner affidavit details work needed and difficulties confronting Maurice Blackburn in ensuring compliance with the subpoenas. Mr Milner and Mr Donelly of Maurice Blackburn estimate it would take at least 4–6 weeks to comply with the subpoenas at a cost in excess of $100,000. That is, to locate and review for legal professional privilege as needed, documents which in my assessment are not material. It is inconsistent with s 24 of the CPA and with the need to determine applications for recusal expeditiously that the subpoenas should be permitted to stand.

The document categories

It remains to say a little about the particular document categories in the two subpoenas.

Categories 2 & 3 of the first subpoena

The defendant submits the ‘agreements’ and the ‘request for tender’ (‘RFTs’) and ‘tenders’ in category 3 will materially assist the Court to resolve the nature, duration and terms of the business relationship between the judge and Mr Walker. In particular, the agreements will enable the Court to examine the terms on which class actions were pursued as part of that business relationship, including terms as to the contingent upside remuneration or returns, and terms as to the sharing of downside financial risks.

The defendant submits that although an association between entities, the inference of association between persons can be made good by reference to potential actions investigated and commenced by those under the individuals and at their direction. As head of the class actions practice group at Maurice Blackburn, the judge was closely familiar with and regularly involved in decision-making and financial modelling in relation to the class actions portfolio. The documents in question could rationally affect the assessment or probability of a fact in issue. It was submitted the number of potential relevant actions considered, whether 5, 10, 30, 50 or 60, would be relevant to the nature of the association, the frequency of contact and the duration of the association.

Maurice Blackburn submit that as drafted category 3 is so wide as to capture tenders or proposals from funders other than those associated with Mr Walker. On no view could such documents be relevant. To the extent a tender or proposal progressed into a formal agreement to conduct a proceeding, those agreements would be caught by category 2.

I do not accept the submission that the RFTs and tenders in relation to potential actions not commenced will materially assist the Court to determine the nature of the relationship between the individuals, the judge and Mr Walker. To seek the production of such documents on subpoena is to do nothing more than to seek to embark on a fishing expedition.

The agreements and documents referred to are not agreements or documents relating to or evidencing a business relationship between the individuals in respect of whom the association is alleged. They are remote from the individuals. The terms of the most recent sharing of remuneration and returns with CASL in the Downer EDI litigation are known.

Following service of the Milner affidavit the defendant now seeks disclosure of the names of the nine actions commenced prior to June 2015 of which it was previously unaware. I do not agree the names of the actions are relevant. The defendant contends that it seeks these documents to enable the bystander and the Court to understand the fees generated through those actions, the revenues derived by the litigation funder and the duration of those actions. The observer is aware of the magnitude of the revenues derived from the 12 actions referred to in the Betts affidavit. Details of revenue derived from the additional actions is not material in addition to what is known.

The percentage remuneration typically required by litigation funders over the period covered by the first subpoena is publicly available information that has been the subject of a number of publications, including those by Professor Vince Morabito referenced in the Betts affidavit. The production of the particular agreements would not materially add to the information already contained in the affidavit evidence including the table at paragraph 74 of the Betts affidavit.

To the extent the category 3 documents pre-date agreements for the conduct of proceedings later entered into the documents are remote and not material to issues to be determined on the recusal application.

It is difficult to understand how preliminary interaction between Maurice Blackburn and the Walker Entities in relation to historic potential actions, not ultimately commenced, could be relevant to the reasonable observer considering whether the judge might be diverted from deciding this proceeding on its merits. It is to be remembered that the evidence in the Betts affidavit and exhibits establishes that the Walker Entities dealt with a variety of plaintiff law firms of which Maurice Blackburn was one. The fact there might have been interaction between Maurice Blackburn and one of those entities in relation to a proposed action is not of assistance when the fair-minded lay observer is called upon to evaluate the association between individuals relied on by the defendant in this case. It is not a legitimate use of a subpoena to have specified documents produced in a ‘speculative attempt’ to identify whether the documents might ultimately be of some evidential value.

I do not agree that the category 3 documents are relevant in the sense that it is ‘on the cards’ or that there is a reasonable possibility that if produced, the documents would constitute evidence that would materially assist the defendant’s application for recusal. I am not satisfied that a legitimate forensic purpose would be served by the production of this category of documents.

The defendant now seeks production of a single form only of each of the category 2(a), 2(b) and 2(d) documents. It submitted there should not be many documents in category 2(c).

The precise terms of agreements and documents in category 2(a)–2(d) are not matters with which the fair-minded lay observer would be concerned. If provided on subpoena they would perhaps reveal details in addition to those already referred to in the Betts affidavit and exhibit. However to the extent they might provide information they would provide information at a level of detail beyond that considered by the fair-minded lay observer. The detail sought is not material to the proper identification of the nature of the association, the frequency of contact and the nature of the interest of the person associated with the decision-maker.

The defendant submits the production of the agreements and the RFTs and tenders will have the effect of comprehensively identifying the ‘Relevant Actions’, thereby, materially assisting the Court to resolve not only the commercial terms and nature of the business relationship, but also its duration, scope and scale. As submitted by Maurice Blackburn it is not apparent how there is a reasonable possibility that the contractual detail of all anterior proceedings which stretch back over nearly two decades would materially assist the defendant to establish how the association between the two individuals who it is not suggested contracted with one another personally, might divert Watson J from deciding this proceeding on the merits.

The observer will already be aware from the Betts and Milner affidavits of the business relationship between Maurice Blackburn of which the judge was a principal and various litigation funding organisations where Mr Walker held various roles and financial interests over many 18 years.

Responding to Maurice Blackburn’s argument that it would be oppressive to require compliance with the subpoena, the defendant submits the time period set out in the definitions of ‘Relevant Commenced Actions’ and ‘Relevant Potential Actions’ is appropriate and directly reflects the duration of the business relationship upon which it relies. I do not agree. As highlighted by the Australian Institute of Judicial Administration, the more remote in time the association, the less likely the fair-minded lay observer will regard the association as one requiring recusal.[177]
[177]The Australasian Institute of Judicial Administration Inc, Guide to Judicial Conduct (3^rd ed, December 2023), 16(i).

The first period, 2005–2015, ended nine years ago. Compliance with the first subpoena will be time consuming and costly. When determining whether or not to require compliance with the subpoenas would be oppressive it is important to have regard to the Court’s obligation in the CPA to further the overarching purpose and also the obligation on parties and practitioners to ensure costs are reasonable and proportionate. Taking those statutory imperatives into account together with the importance of the currency of the association when applying the Ebner test, it is not an answer to the subpoena being oppressive to say that the time period is a lengthy one.

Category 4 of the first subpoena (summaries of time billed)

The defendant submits that having regard to the evidence that Maurice Blackburn has not identified the existence of any documents or reports on its current time recording platform responsive to the terms of category 4; and, given that Maurice Blackburn has foreshadowed confidentiality claims in respect of cost consultant reports, it has sought to streamline and simplify the process of gathering the category 4 information by filing the second subpoena.

To the extent category 4 is still pressed I reject the defendant’s submission that the number of hours worked by the judge on each of the relevant actions, say, two hours per day on 21 actions, 50,000 hours of time, is relevant to a proper understanding of the material objective facts concerning the frequency, duration, scale and nature of the interactions and the association between the judge and Mr Walker.

Category 5 of the first subpoena (time billing records)

The defendant narrowed category 5 documents to read: ‘Documents recording and/or summarising billed or recorded time entries made by Mr Andrew John Watson in any of the Relevant Actions insofar as those time entries refer to Mr John Walker and/or CASL’.

The defendant submits the time entry records over approximately 20 years will materially assist the Court to examine the frequency and intensity of the personal contact between the judge and Mr Walker and the Walker Entities. While the defendant expects the narrations in the time entry records may be subject to claims for legal professional privilege, it submits the dates and extent of the time entries will nevertheless materially assist in further clarifying the frequency of contact and the extent of the relationship.

The defendant submits that records of unbilled time by Maurice Blackburn would reveal interaction in the conduct of a joint endeavour to investigate and prosecute actions determined worthy at a time when the judge and Mr Walker were at the apex of their organisations with oversight of such matters.

The plaintiff submits the fair-minded lay observer does not have ‘inside knowledge’ of the specific relationship between the judge and Walker Entities. It submits there is no need to prove the observer’s ‘knowledge of the matter beyond knowledge of the relationship which subsists’ as ‘the question is not whether the tribunal will in fact be biased, but whether a reasonable man with no inside knowledge might well think that it might be biased’.[178] This is because the fair-minded lay observer is concerned with appearance rather than reality.
[178]Hannam v Bradford Corporation [1970] 1 WLR 937, 949 (Cross LJ).

Maurice Blackburn submit these categories are premised on the proposition the reasonable observer would, relevantly, have regard to the amount of time that the judge worked on cases that were funded by Walker Entities in determining whether his Honour might not be able to decide this case impartially. It submits that it is not apparent how the amount of time the judge spent on such matters, the vast majority of which date back over a decade, could rationally affect the Court’s assessment of apprehended bias in this proceeding.

I do not agree with the defendant that this category of documents is relevant. The fair-minded lay observer will not be concerned to probe records of unbilled time, particularly when the observer is aware of very substantial billed time on actual matters underpinning significant revenues including those in the table at paragraph 74 of the Betts affidavit. Records of unbilled time are not material and would not be admissible in support of the defendant’s recusal application. No legitimate forensic purpose is served by requiring the production of such documents on subpoena.

The detail of billed time, time entries concerning matters actually pursued is detail to which the observer would not descend. Time billing records the subject of category 5 are not relevant to the application by the judge of the test in Ebner standing in the shoes of the fair-minded lay observer.

Separately Maurice Blackburn submits the Milner Affidavit establishes that:

(a) the platform used for time recording analysis and reports — Qlik Sense — does not appear to have all time entries from before 2018;

(b) Maurice Blackburn has not identified any documents or reports on Qlik Sense which are responsive to category 4, which would mean that further searches for the ‘Relevant Commenced Actions’ would be necessary, including on the relevant iManage matter file;

(c) while it may be possible for Maurice Blackburn to export the judge’s individual time records for the purpose of searching for entries caught by category 5, there are 52,000 time entries belonging to the judge that would require exporting and searching; and

(d) Maurice Blackburn would also need to undertake searches of iManage files for the purpose of responding to category 5, which may involve the consideration of privilege claims.

Having regard to these matters I also consider that it would be oppressive and contrary to s 24 of the CPA to require production of the time billing records.

Category 6 of the first subpoena (2020 – 2023 communications)

The defendant does not press sub-category 6(d). It continues to sub-categories 6(a)–(c). It submits the communications referred to in 6(a) will materially assist in resolving the judge and Mr Walker’s association and involvement with the ‘Keep Corporations Honest’ campaign. It submits the communications referred to in sub-categories 6(b) and 6(c) will materially assist in clarifying contact that was not the subject of billed or recorded time entries and as such not captured by category 5 or the second subpoena.

The plaintiff submits this category seeks documents evidencing direct communications between the judge and Mr Walker; CASL; or ‘ICP’ (being three funding entities associated with Mr Walker), in connection with a lobbying group ‘Keep Corporations Honest’, any commenced or investigated proceeding funded or proposed to be funded by Walker Entities (including Lidgett v Downer EDI Limited, S ECI 2023 01835, which is currently on foot) and any unspecified ‘commercial or other relationship’ between Maurice Blackburn and Mr Walker, CASL or ICP. The plaintiff submits this is a fishing expedition and that the documents will not materially assist the Court in respect of any issue arising for determination.

Maurice Blackburn submits category 6 is akin to a discovery category:

(a) …Given the nature of the communications it seeks, each responsive email would need to be reviewed for privilege. The burden of the category is substantial because it is not confined to communications between the judge and Mr Walker, but extends to communications between the judge and CASL and ICP, which involves communications with any representative of those entities in relation to the matters referred to at subparagraphs 6(a) to (d).

(b) The ‘between’ language is also apt to pick up emails sent by those representatives (or Mr Walker) which were not addressed to the judge but to which he was were copied.

(c) Against that background, the forensic purpose is to be weighed. The Betts affidavit already contains extensive evidence about the involvement of the judge and Mr Walker in the ‘Keep Corporations Honest’ group and the Downer EDI litigation. It is not apparent why it is relevant for the fair-minded observer to know anything about specific, private communications between The judge and Mr Walker, or between the judge and representatives of CASL and/or ICP, in order to assess whether the fact of a business relationship between the individuals, the judge and Mr Walker might possibly divert the judge from deciding this proceeding on the merits.

(d) It is plain that by category 6 the defendant is seeking to obtain documents to see whether they are relevant, which is impermissible.

The ‘Keep the Corporations Honest’ group is the subject of extensive evidence in section K of the Betts affidavit and the exhibit. The fair-minded lay observer is not engaged in an exhaustive search for detail. Given the existing evidence I do not consider it is ‘on the cards’ that documents in category 6(a) might materially assist the defendant to make out its recusal application.

Concerning category 6(b), documents relating to the Downer EDI litigation are likely to be privileged and/or commercially sensitive. The latter is relevant when it is the defendant who is seeking the production of such documents. There is one sub-category within the description in 6(b) that may be relevant and material, even if redacted. That is, documents comprising communications, or recording or evidencing communications between the judge and Mr Walker personally concerning the Downer EDI litigation. On the assumption (contrary to my earlier findings) that evidence is admissible and a subpoena is permissible on an application such as the present, such communications may be relevant and material to the observer, for example, if extensive communications took place in recent times between the individuals concerned. Otherwise, I do not consider a legitimate forensic purpose is made out concerning the documents in category 6(b).

Concerning category 6(c), there is no evidence there were any other ‘Relevant Actions’ in the period of 1 January 2020–12 November 2023, beyond the Downer EDI litigation. There is no basis to suppose documents in category 6(c) exist. If there were communications between the judge and Mr Walker relating to such Relevant Actions, if material to the application the judge will be in a position to make disclosure.

The second subpoena

On its face, the second subpoena suffers from similar vices to those earlier identified concerning category 5 of the first subpoena. It calls for production of ‘Maurice Blackburn invoices in relation to the Relevant Actions which contain time entries of Mr Andrew John Watson’.

The defendant submits the invoices will materially assist the Court to properly examine the judge’s personal involvement in the Relevant Actions and to determine his closeness, involvement, and direct association with those matters that were funded, managed or the subject of instructions by Mr Walker or the Walker Entities. Although the defendant expects that the narrations in the invoices may be the subject of claims for legal professional privilege, it submits that other specified details in the invoices will materially assist in clarifying the judge’s involvement in the Relevant Actions and thus establish the extent of the relationship.

The defendant’s submission exposes the vice of the second subpoena. The application through the eyes of the fair-minded lay observer of the test in Ebner does not call for a Royal Commission. What the observer requires is knowledge of the material objective facts. Enough information to inform himself or herself to the extent necessary to make a fair judgement. How one might ask rhetorically might any of the information that might be gleaned on production pursuant to the second subpoena be likely to be material evidence on a recusal application.

The information contained in the documents sought to be produced whether before or after redaction for legal professional privilege is not information that falls within the broad knowledge of the facts taken into consideration by the observer.

Disposition

For the reasons discussed, both subpoenas are set aside.

I will order the defendant pay the plaintiff and Maurice Blackburn’s costs of the two subpoenas and the dispute concerning them including the costs of the hearing and submissions on a standard basis.

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[2024] VSC 712

15 November 2024