Tedra Australia Pty Ltd v Greater Western Water Corp

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
TECHNOLOGY, ENGINEERING AND CONSTRUCTION LIST

S ECI 2015 00119

TEDRA AUSTRALIA PTY LTD

Plaintiff

GREATER WESTERN WATER CORPORATION

(formerly CITY WEST WATER CORPORATION)

Defendant

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JUDGE:	DELANY J
WHERE HELD:	Melbourne
DATE OF HEARING:	5, 6, 12 December 2022
DATE OF RULING:	2 March 2023
CASE MAY BE CITED AS:	Tedra Australia Pty Ltd v Greater Western Water Corp
MEDIUM NEUTRAL CITATION:	[2023] VSC 96

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SPECIAL REFEREE – Apprehended bias – Bifurcated reference – Referee refused to recuse himself following first report – Failure to refer to written submissions and evidence – Credit findings concerning lay and expert witnesses – Application refused.

APPREHENDED BIAS – Drawing of inferences – Differences between credibility and reliability – Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, CNY17 v Minister for Immigration and Border Protection (2019) 268 CLR 76, Webb v The Queen (1994) 181 CLR 41, Johnson v Johnson (2000) 201 CLR 488, Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507, State of Victoria v Psaila [1999] VSCA 193, Masters Home Improvement Pty Ltd v North East Solution Pty Ltd (2017) 372 ALR 440 applied, Antoun v The Queen (2006) 224 ALR 51, AJH Lawyers Pty Ltd v Careri (2011) 34 VR 236, Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 411, DGB18 v Minister for Home Affairs [2019] FCA 1034, Vakauta v Kelly (1989) 167 CLR 568, McIntosh v The Queen [2015] NSWCCA 184, IMM v The Queen (2016) 257 CLR 300, Tukuafu v The Queen [2014] VSCA 345; R v Markuleski (2001) 52 NSWLR 82 referred to.

ADEQUACY OF REASONS – Whisprun Pty Ltd v Dixon (2003) 200 ALR 447, Prouten v Chapman [2021] NSWCA 207, Wenco Industrial Pty Ltd v WW Industries Pty Ltd (2009) 25 VR 119 referred to.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Gleeson KC with Mr R Rozenberg and Mr G Lubofsky	Thomson Geer
For the Defendant	Mr N Hopkins KC with Mr K Naish	Corrs Chambers Westgarth

TABLE OF CONTENTS

A.. Overview........................................................................................................................................ 1

B.. The history of the Dispute and the Reference....................................................................... 2

C.. The nature of the Court’s task................................................................................................. 13

D.. The test for apprehended bias................................................................................................. 14

E... The grounds for recusal relied upon by GWW.................................................................... 22

E.1... The grounds for recusal.................................................................................................... 22
E.2... GWW’s overarching submissions................................................................................... 22
E.3... Tedra’s response to the overarching submissions........................................................ 24
E.4... Findings concerning the overarching submissions...................................................... 27

F... The first ground: Failure to consider GWW’s evidence or submissions........................ 33

F.1... Example 1 – General failure to consider GWW’s submissions regarding witnesses 34
GWW’s submissions......................................................................................................... 34
Tedra’s submissions.......................................................................................................... 38
Findings Concerning F.1................................................................................................... 40

F.2... Example 2 – Evidence about Altona............................................................................... 45
GWW’s submissions......................................................................................................... 46
Tedra’s submissions.......................................................................................................... 46
Findings Concerning F.2................................................................................................... 47

F.3... Example 3 – Dr Baigent..................................................................................................... 50
GWW’s Submissions......................................................................................................... 50
Tedra’s Submissions.......................................................................................................... 52
Findings concerning F.3.................................................................................................... 52

F.4... Example 4 – Mr Azar......................................................................................................... 54
GWW’s Submissions......................................................................................................... 54
Tedra Submissions............................................................................................................. 55
Findings concerning F.4.................................................................................................... 56

F.5... Example 5 – Mr D’Agostin............................................................................................... 57
GWW’s Submissions......................................................................................................... 57
Tedra’s Submissions.......................................................................................................... 58
Findings concerning F.5.................................................................................................... 59

F.6... Example 6 – GWW’s Reply submissions........................................................................ 61
GWW’s Submissions......................................................................................................... 62
Tedra’s Submissions.......................................................................................................... 63
Findings concerning F.6.................................................................................................... 63

F.7... Example 7 – Mr Ruiperez, Mr Sola, Mr Fraser.............................................................. 65
GWW Submissions............................................................................................................ 65
Tedra’s Submissions.......................................................................................................... 69
Findings concerning F.7.................................................................................................... 71

F.8... Example 8 – Mr Sola’s Notes............................................................................................ 74
GWW’s submissions......................................................................................................... 75
Tedra’s Submissions.......................................................................................................... 76
Findings concerning F.8.................................................................................................... 76

F.9... Example 9 – Defect SRP 406 (Pressure Relief Valve).................................................... 77
GWW’s submissions......................................................................................................... 78
Tedra’s Submissions.......................................................................................................... 78
Findings concerning F.9.................................................................................................... 79

F.10. Consideration of Examples.............................................................................................. 79
GWW submissions............................................................................................................ 79
Tedra Submissions............................................................................................................. 81
Findings concerning F.10.................................................................................................. 82

G.. The Second Ground – Credit/Reliability findings.............................................................. 84

G.1... GWW’s Submissions......................................................................................................... 84
G.2... Tedra’s Submissions.......................................................................................................... 85
G.3... The Main Issues Concerning Ground 2.......................................................................... 86
G.4... Credibility or Reliability; is the distinction relevant?.................................................. 87
Tedra’s Submissions.......................................................................................................... 87
GWW Submissions............................................................................................................ 88
Conclusion as to credibility/reliability.......................................................................... 90

G.5... Bifurcated Hearings.......................................................................................................... 91
GWW Submissions............................................................................................................ 92
Tedra Submissions............................................................................................................. 92
Finding as to bifurcated hearing..................................................................................... 93

G.6... Findings made in the Report............................................................................................ 95
GWW’s Submissions......................................................................................................... 95
Tedra’s submissions.......................................................................................................... 97
What did the SR find in the Report?............................................................................... 99

G.7... Findings concerning the Second Ground..................................................................... 104

Disposition...................................................................................................................................... 104

HIS HONOUR:

A. Overview

This litigation has a very long and sorry history. The proceeding was initiated by Tedra Australia Pty Ltd (‘Tedra’) against City West Water Corporation (now Greater Western Water Corporation) (‘GWW’) in 2015. In 2017, aspects of the dispute were referred to a Special Referee (‘SR’). More than five years on, the reference remains incomplete. While the SR provided his first report on 31 May 2021 (the ‘Report’), a second report is required to complete the reference.

GWW contends that the reference should be brought to an end because of apprehended bias on the part of the SR. These reasons concern whether or not that is the case.

Two primary grounds and one supporting ground are relied on by GWW in support of its application. The first primary ground concerns the SR’s alleged failure or refusal to consider GWW’s evidence or submissions in the Report. The second primary ground concerns findings made by the SR in the Report regarding lay and expert witnesses that GWW alleges might affect the SR bringing an impartial mind to the completion of the reference. The supporting ground, relied on as ‘incremental conduct’; concerns the apprehension said to be revealed by subsequent conduct; the hearing of the recusal application on 11 May 2022 by the SR (‘Recusal Hearing’) and the 7 June 2022 ruling on the application (‘Recusal Ruling’) in which the SR declined to recuse himself on the ground of apprehended bias.

These reasons are longer than is desirable. That is so due to the manner in which the application was framed, including the reliance, concerning the first ground, on nine ‘examples’ of conduct; the need to address each of those examples, and the incremental reliance on the Recusal Ruling. They are also longer than is desirable due to the volume of materials relied on, a 3,291 page court book.

In CNY17 v Minister for Immigration and Border Protection,[1] Kiefel CJ and Gageler J identified what is required in order to establish an apprehension of bias:[2]

Establishment of an apprehension of bias on the part of the Authority then requires the taking of two essential steps: first, identification of the factor which it is postulated might have led the Authority to have decided the review otherwise than on an independent and impartial evaluation of the merits; and, second, articulation of how that factor might have led the Authority to have decided the review otherwise than on an independent and impartial evaluation of the merits. Taking those two steps is necessary to provide the foundation for the third and critical step in the application of the bias rule. That is the step of assessing whether the fair-minded lay observer might reasonably apprehend in the totality of the circumstances that the articulated departure might have occurred. In taking that third step, “it is the court’s view of the public’s view, not the court’s own view, which is determinative”.

[1][2019] HCA 50; (2019) 268 CLR 76.

[2]Ibid 88 [21] (citations omitted).

As Deane J observed in Webb v The Queen (‘Webb’):[3]

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.

[3][1994] HCA 30; (1994) 181 CLR 41, 73-74.

For the reasons that follow, I have determined that the fair minded lay observer (‘the observer’) would not entertain a reasonable apprehension of bias.

The SR was correct to refuse the recusal application. He should continue with the reference as promptly as practicable.

B. The history of the Dispute and the Reference

The substantive issues in the proceeding concern the design and construction of a Salt Reduction Plant (‘SRP’) and related Ancillary Works (‘AW’) as part of the West Werribee Dual Water Supply Scheme.[4] Three contracts for the design and construction (‘D&C’) of the SRP and AW and for the operation and maintenance of the SRP were entered into by the parties in February 2012:[5]

(a)the West Werribee Dual Supply Project – CWC 1619 Design and Construct Contract (the ‘SRP D&C Contract’);
(b)the West Werribee Dual Supply Project – CWC 1705 Design and Construct Contract (the ‘AW D&C Contract’);
(together, the ‘D&C Contracts’); and
(c)the West Werribee Dual Supply Project – CWC 1619 Operation and Maintenance Contract (the ‘SRP O&M Contract’).

[4]Plaintiff, Second Amended Statement of Claim dated 13 November 2015 (‘2ASOC’).

[5]2ASOC, [3]; Defendant, Fourth Amended Defence and Counterclaim dated 3 July 2020 (‘4ADC’), [3].

Construction commenced in about June 2012.

Tedra submitted its Commissioning Test Report (‘CTR’) on 4 April 2014.[6] It sought GWW’s acceptance of the CTR, a prerequisite to proceeding to Plant Performance Testing.[7] GWW did not accept that Tedra had complied with its contractual obligations.[8] It said that Tedra’s work was beset by numerous defects, and that commissioning was incomplete.
[6]2ASOC, [48]-[49]; 4ADC, [48]-[49].
[7]2ASOC, [49]-[50]; 4ADC, [49]-[50].
[8]2ASOC, [51]; 4ADC, [51].

Tedra alleges that GWW’s refusal to accept the CTR was wrongful and that GWW’s actions caused delays for which Tedra was entitled to extensions of time.[9]
[9]2ASOC, [52]-[53].

GWW’s refusal to accept Tedra’s claimed commissioning and its CTR led to a standoff that continued between April 2014 and October 2015.

On 2 April 2015, Tedra commenced these proceedings claiming extensions of time under the D&C Contracts. GWW counterclaimed for defective work.

In October 2015, GWW resumed occupation of the SRP and AW site. GWW terminated the SRP D&C Contract.[10] It took the remaining work under the AW D&C Contract out of Tedra’s hands.[11] It terminated the SRP O&M Contract.[12]
[10]2ASOC, [91]-[92]; 4ADC, [91]-[92].
[11]2ASOC, [98]-[99]; 4ADC, [98]-[99].
[12]2ASOC, [102]; 4ADC, [102].

Tedra treated GWW’s actions as repudiatory.[13] Tedra said that it accepted the claimed repudiation.[14] It is common ground that, by November 2015, the D&C Contracts were at an end.
[13]2ASOC, [93], [100].
[14]2ASOC, [93], [100].

By Order made on 30 November 2017, pursuant to Order 50 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘the Rules’), three questions were referred to the SR, Mr Shnookal QC, for his opinion:

(a)the question of liability in respect of the items of defective, omitted or non-conforming work or material alleged by GWW in the proceeding;
(b)if Tedra is liable in respect of any alleged item of defective, omitted or non-conforming work or material, the question of whether any such liability (either alone or in combination with other items) prevented Tedra in reaching the stage of Practical Completion under the SRP D&C Contract or the AW D&C Contract; and
(c)the question as to the relief (if any) to be granted in respect of the items of defective, omitted or non-conforming work or material alleged by GWW in the proceeding.

The parties agreed upon a two stage process for the conduct of the reference. There was disagreement about the precise scope and content of the stages. On 7 December 2017, the fourth procedural conference took place. The parties debated the extent to which the question of Practical Completion could or should be decided in the absence of rectification evidence. Following a fifth procedural conference on 17 April 2018, the SR determined that issue in favour of GWW’s submissions:[15]

In my view I can consider the issue of whether or not any particular defect has the effect of preventing Practical Completion without necessarily considering what rectification work is necessary and how it would be carried out.
…
[I]f in considering a particular defect the evidence of rectification will assist in applying the term of a Contract relating to Practical Completion for that particular defect, I will not be able to make a determination. That defect will have to be left to a later stage of the Special Reference when rectification evidence is closed.

[15]Special Referee, Special Referee’s Letter 9, 22 April 2018, Item 2.

The reference proceeded on the basis that in the first phase the SR would determine the question of whether Tedra is liable for each defect raised by GWW and, to the extent possible on the evidence, whether any such defect prevented Tedra from reaching Practical Completion. After the provision of the SR’s Report marking the completion of the first phase, it was agreed the parties would file further evidence regarding rectification and quantum limited to those defects for which the SR found Tedra liable. In the second phase, the SR would determine which of the defects for which he had found Tedra liable, but could not earlier determine the effect of such a defect on Practical Completion in the absence rectification evidence, prevented Practical Completion. Otherwise, the second phase was to involve the SR determining the relief to be granted to GWW in respect of defects for which Tedra was found liable.

The parties agreed that after the SR had prepared both reports, the Court would determine the question of adoption.

On 18 May 2018, the SR made procedural directions regarding the conduct of the first phase of the reference, including:

(a)written opening submissions limited to 40 pages per party;
(b)a ‘stop-clock’ hearing, fixed for a duration of 20 sitting days; and
(c)a party shall be entitled to impugn the evidence of an independent expert witness or lay witness submitted by the opposing party which is not challenged in cross-examination. The rule in Browne v Dunn shall not apply.

As the reference progressed, the SR made directions requiring the consolidation of the disputed defects in a single ‘Evidence Matrix’, setting out GWW’s case in relation to each defect, Tedra’s responses and the identification of the evidence relating to each defect. The Evidence Matrix was prepared prior to the hearing and was the subject of later updates. While the Evidence Matrix identified the evidence to be relied on, it did not address issues of the admissibility of that evidence.

On 17 December 2018, the SR directed that any issue arising in relation to the admissibility of written evidence shall be raised by the parties in their oral or written closing submissions for determination by the SR.

During March and April 2019, a four week stop-clock hearing took place. During the hearing, the SR noted that he was bound by the rules of evidence and the parties conducted themselves on that basis.

The first week of the hearing was taken up by openings and the cross-examination of lay witnesses. The two main witnesses for Tedra; Mr Ruiperez and Mr Sola, were cross-examined. Tedra cross examined six of the 24 lay witnesses who provided lay statements for GWW.

The remaining three weeks of the hearing was devoted to expert evidence, given in a series of conclaves. The SR described the conclave process in the Report:[16]

The conclaves were arranged by Discipline/sub discipline/specific defect list with experts coming and going as appropriate. In total, less than half of the defects on which I am to provide an opinion on were touched on during the hearing. Up to 5 experts would take part in a single conclave. The process I adopted was to relate what I understood about the experts’ respective positions then discuss the defect with them. I would then pass the experts to counsel to cross examine on a defect by defect basis – if counsel had anything they wished to explore at that point.

[16]Special Referee, Report of the Special Referee, 31 May 2021 (‘Report’), Part A, [79].

Written closing submissions were extremely lengthy.

On 19 August 2019, GWW delivered 3,712 pages of submissions, including 309 pages of general submissions (the ‘General Section’), the remainder concerning individual defect claims. On 20 November 2019, Tedra delivered 3,693 pages of submissions, including 266 pages of general submissions. On 28 February 2020, GWW delivered 707 pages of reply submissions, including 164 pages of general submissions. The written submissions relied on over 75,000 pages of exhibits.

The General Section of GWW’s written closing submissions was divided into sections including:

—    A Introduction
o   A.1 General
o   A.2 Structure of these submissions
o   A.3 Introduction to defect issues and general themes of these submissions
o   A.4 Determinations sought (including summary of findings sought)

—    B    Background to Dispute
o   B.2 Chronology of Relevant Events
o   B.3 Commissioning Test and Commissioning Test Report (‘CTR’)

—    C   Introduction to Defect Issues
—    D   Contractual Requirements
—    E    Onus of Proof
—    F    Lay Witnesses
—    G   Documentation
—    H   Safety Issues
—    I     Expert Evidence

Section A.2 of the General Section described the structure of GWW’s submissions and the approach adopted to individual defects, including as follows:[17]
[17]Greater Western Water Corporation, ‘CWW’s Written Outline of Closing Submissions before the Special Referee’, 19 August 2019 (‘GWW Submissions for the SR’), [11]-[15], [21].

11.This document contains the general submissions which CWW seeks to have taken into account by the Special Referee in addressing each of the individual defects (referred to as the General Submissions). Individual defect submissions (described further below) are in the Attachments to this document.
12.These General Submissions address matters of general application to each of the individual defect submissions and the overall dispute. …
13.The General Submissions are relied upon as applying to each individual defect item. Without limiting that general reliance, to assist the Special Referee the General Submissions are cross-referenced throughout the defect-specific submissions whenever most applicable.
14.There is an index of all defect items within the Special Reference at Attachment A, which identifies where each defect item is specifically addressed. The individual defect submissions are grouped in “Chapters”, each of which is listed in Attachment A and is a separate attachment to this document. These Chapters reflect the common grouping, themes and sequence adopted for the expert conclaves during the hearing. …
15.Each Chapter covers “conclave” items, being those items addressed during the hearing, and then non-conclave items being items that belong within the Chapter thematically, but were not covered during the hearing. These items are being addressed exclusively on the papers.

…
21.A sample of the tabular submission format for an invidivual [sic] defect is set out below. The sample includes an explanation of its content when used for each defect submission.

A copy of the sample of the tabular submission referred to in Section A.2, paragraph 21, is Annexure A to these reasons.

Chapters F and I of the General Section were described by GWW in submissions filed in support of the present application as follows:

(a)Chapter F (74 pages) concerning lay evidence, divided into three parts; Section F.1 addressing the four Tedra witnesses (30 pages), F.2 the witnesses Tedra did not call (5 pages), and F.3 concerning GWW’s witnesses including credit attacks made upon them by Tedra (39 pages); and
(b)Chapter I (72 pages) which addressed the evidence of the expert witnesses. Chapter I included submissions about the relevance and admissibility of Tedra’s expert evidence and addressed criticisms of the GWW witnesses made by Tedra.

GWW provided three versions of its written closing submissions. A paper version, an electronic consolidated version which did not hyperlink to the Epic system used for the conduct of the reference, and a third version, in the Epic system. Generally, a reference in the Report to a page number in GWW’s submissions is a reference to the Epic version of the submissions. The SR said that he did not use the electronic consolidated version of the submissions extensively because it did not include hyperlinks.

On 10 March 2020, the SR sent a letter to the parties (‘SR Letter 15’). He advised that, given the size of the written submissions, oral closings would take place after he had a well-developed idea of his thinking on individual claims and could provide the parties with specific issues that troubled him.

On 9 August 2020, the SR sent a further letter to the parties (‘SR Letter 16’). SR Letter 16 set out the SR’s preliminary views concerning construction of the contracts and raised some factual matters for consideration by the parties.

Because the SR’s preliminary views were either neutral or against the interests of GWW, the parties agreed that GWW would present its oral closing first. The parties substantially confined their oral closing to the issues identified in SR Letter 16. While oral closing submissions were originally scheduled to take place on 7 and 8 October 2019, it was not until September 2020 that they were made.

The SR handed down his Report of approximately 1,400 pages on 31 May 2021. He noted that each of the 534 defects referred for his opinion was alleged by GWW to be a breach of between 33 and 36 terms of the SRP D&C Contract or the AW D&C Contract.

The Report is divided into nine parts, including Part B, Contract Interpretation; Part C, Witnesses; and Parts D – I concerning defect claims relating to different aspects of the contract works. Most of the Report, over 1,000 pages, is taken up by a detailed consideration of the alleged defects.

In its submissions on the present application, Tedra summarised the findings in the Report as follows:

(a)GWW established 175 of its defect allegations;
(b)of those allegations, 21 defects might (on their own) be capable of preventing Tedra from reaching Practical Completion; however
(c)the SR was unable to determine the question of Practical Completion until such time as the parties filed rectification evidence.[18]

[18]Tedra noted that ‘[t]his was a result principally of sub-paragraphs (a)(ii)-(iii) of the definition of Practical Completion, which required consideration of questions concerning rectification of the works – see Court Book p 1112’.

On 21 October 2021, the Court ordered by consent that:[19]

The Special Referee appointed pursuant to paragraph 2 of the Order of the Honourable Justice Vickery made 30 November 2017 proceed with the further hearing of the reference and is to produce a second report in writing to the Court on the questions referred insofar as they have not been answered in the first report delivered by Special Referee on 31 May 2021.

[19]Order of Riordan J in Tedra Australia Pty Ltd v Greater Western Water Corporation (formerly City West Water Corporation) (Supreme Court of Victoria, S ECI 2015 00119, 21 October 2021) (‘October Order’), [1].

A second hearing for the completion of phase 2 of the reference is currently anticipated to take place in September 2023. Further evidence is expected to be filed by GWW in advance of that hearing, including from persons who made decisions as to whether and how particular defects were rectified. GWW submitted that each of Mr Kumar, Mr Fraser and Mr Giesemann, who gave evidence and were cross-examined at the first hearing and whose evidence is discussed in Part C of the Report, are likely to give evidence again.[20]
[20]Although GWW did not directly refer, on the present application, to the likelihood of Mr Kumar, Mr Fraser and Mr Giesemann giving evidence again at the second hearing, the Court was directed during the hearing to the affidavit of Joseph Barbaro in which they are identified as likely witnesses. In addition, GWW’s submissions for the recusal application stated that further evidence ‘may need to come from Mr Fraser, Mr Kumar, and/or Mr Giesemann’.

The 21 October 2021 Order recorded that it was ‘made without prejudice to any application which the defendant [GWW] may bring before the Special Referee in respect of his ability to conduct and complete the further hearing of the reference’.[21]
[21]October Order, ‘Other Matters’.

GWW subsequently made an application to the SR that he recuse himself on the basis of apprehended bias. GWW contended that numerous aspects of the Report, taken in combination, satisfied the test for apprehended bias. As described in the Recusal Ruling, ten ‘findings’ upon which GWW relied (corresponding in part to some of the examples relied on by GWW in the present application) included:[22]
[22]Special Referee, Ruling: Apprehended Bias Application, 7 June 2022 (‘Recusal Ruling’), [7].

(a)criticisms of witnesses and their credibility, in particular (though not exclusively) GWW’s witnesses;
(b)endorsements of the credibility of Mr Sola and his evidence and the total failure to consider or address GWW’s submissions on that issue;
(c)dealing with the evidence of Mr Ruiperez, one of Tedra’s primary witnesses, in a manner inconsistent with the findings made by the Special Referee on his credibility;
(d)findings in respect of the parties’ respective experts overwhelmingly in favour of Tedra’s experts and the related failure to consider or address GWW’s relevant submissions;

…
(g)numerous instances of the Special Referee not taking into account GWW’s submissions on matters of importance to the deciding of the existence of a defect or the credibility of witnesses;
(h)gratuitous commentary by the Special Referee on issues not before him, in a manner antithetical to GWW’s interests…

Following receipt of written submissions, the SR conducted a one day in person Recusal Hearing.

At the 11 May 2022 Recusal Hearing, GWW submitted:[23]

[O]ne of the main complaints we make is that you have denied us procedural fairness and/or natural justice and/or exhibited an inclination not to hear our submissions, and your repeated failure or refusal to consider our evidence or submissions.
…
A failure or refusal to hear submissions or to consider evidence while arriving at a decision is a form of prejudgment, which is well established at least [establishing] apprehended bias.

[23]Transcript of Proceedings, Recusal Hearing before the Special Referee, 11 May 2022 (‘Recusal Hearing Transcript’), 2:8-13, 3:7-10.

In the Recusal Ruling, the SR described GWW’s submissions as follows:[24]

If evidence or closing submissions are not referred to in the Report, that is evidence the Special Referee did not consider them. If the Special Referee did not consider GWW’s evidence and closing submissions, then a FMLO [fair minded lay observer] would conclude GWW may not receive a fair hearing in phase two of the Special Reference.

[24]Recusal Ruling, [14].

Tedra opposed the recusal application. It submitted that both parties were treated equally in the Report and there is no substance to the bias allegations.

Tedra submitted that, given the size of the closing submissions and the volume of evidence, it was inevitable that not all submissions and evidence would be referred to in the Report. It submitted that, to the extent submissions or evidence were not referred to in the Report, the SR adopted an even handed approach. By way of example, a very important closing submission made by it, namely, that GWW was motivated to find defects to prevent the plant coming into operation as a result of the commercial position in which it found itself, was ignored by the SR. An important piece of evidence which it highlighted, a smiley face on an email in which a GWW employee reported finding a new defect, was not mentioned in the Report. While the SR did not accept Tedra’s submissions on this issue, the Report did not refer to the evidence or to Tedra’s submissions.

On 7 June 2022, the SR delivered the Recusal Ruling in which he determined not to recuse himself. The Recusal Ruling includes the following observation:[25]

GWW’s submissions focus often, but not always, on small extracts of the Report as supporting the application.

[25]Recusal Ruling, [14].

On the hearing of this application, GWW submitted that, in the Recusal Ruling, the SR got both the facts and the law wrong. It submitted that the SR’s criticism of its submissions in the Recusal Ruling was misplaced and that such criticism could only be made by the SR failing to address GWW’s primary submission. Namely, that he had overlooked Chapters F and I of the General Section in their entirety and that the examples relied on were a subset of that overarching issue.

C. The nature of the Court’s task

The substantive question for determination is whether the SR should continue with the reference, or whether he should be prevented from doing so by reason of apprehended bias.

The parties proceeded on the basis that although many of the cases concerning apprehended bias relate to the courts, tribunals and decision makers, the rule applies to a person appointed as a special referee under the Rules.[26]
[26]Per Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17; (2001) 205 CLR 507, 549 [136] (Kirby J).

Tedra submitted that the hearing principally concerns whether the Court should adopt the Recusal Ruling. Because the question is one of adoption, the principles outlined in Wenco Industrial Pty Ltd v WW Industries Pty Ltd (‘Wenco’)[27] have application. The Court ought to ‘have a disposition towards acceptance of the [R]eport, for to do otherwise would be to negate both the purpose and the facility of referring complex technical issues to independent experts for inquiry and report’.[28]
[27][2009] VSCA 191; (2009) 25 VR 119, 122 [7] (Redlich and Bongiorno JJA and Beach AJA).
[28]Tedra Australia Pty Ltd, ‘Tedra’s Submissions Regarding Apprehended Bias’, 23 November 2022 (‘Tedra Submissions’), [10], quoting Wenco Industrial Pty Ltd v WW Industries Pty Ltd [2009] VSCA 191; (2009) 25 VR 119, 127 [17(d)] (Redlich and Bongiorno JJA and Beach AJA).

GWW accepts that the principles in Wenco have application to an adoption hearing. However, the Recusal Hearing was not part of the reference. It submitted the application is effectively an appeal as of right against the Recusal Ruling. The Court should consider the question of recusal de novo and not superimpose a different layer of satisfaction than would ordinarily apply.

I accept that it is for the Court to consider the recusal issue afresh. I agree that the Recusal Ruling is not part of the reference. I do not approach the application with the disposition towards acceptance to which Wenco refers. While the hearing is a hearing de novo, it is appropriate to take into account the Recusal Ruling. That is so both as a matter of general principle, giving such weight to the decision of the SR as appears proper,[29] and because the Recusal Ruling is relied on by GWW as incremental conduct in support of the relief claimed.
[29]Southern Motors Pty Ltd v Australian Guarantee Corp Ltd [1980] VR 187, 190 (Starke, Murphy and Brooking JJ).

D. The test for apprehended bias

Apprehended bias looks to perceptions, and considers the matter from the perspective of how it may appear.[30] The test is that set out by Gleeson CJ, McHugh, Gummow and Hayne JJ in Ebner v Official Trustee in Bankruptcy (‘Ebner’):[31]

[A] judge is disqualified if 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.

[30]Australian Law Reform Commission, Without Fear or Favour: Judicial Impartiality and the Law on Bias (Report No 138, December 2021) 84 [3.7].

[31][2000] HCA 63; (2000) 205 CLR 337, 344 [6] (Callinan J agreeing at 396 [182]) (emphasis added) (citations omitted). Which the parties agreed before the Special Referee applied equally to special references.

The test in Ebner forms part of a wider consideration of the topic by Gleeson CJ, McHugh, Gummow and Hayne JJ which includes the identification of the two step process to be undertaken:[32]

The apprehension of bias principle may be thought to find its justification in the importance of the basic principle, that the tribunal be independent and impartial. So important is the principle that even the appearance of departure from it is prohibited lest the integrity of the judicial system be undermined. There are, however, some other aspects of the apprehension of bias principle which should be recognised. Deciding whether a judicial officer (or juror) might not bring an impartial mind to the resolution of a question that has not been determined requires no prediction about how the judge or juror will in fact approach the matter. The question is one of possibility (real and not remote), not probability. Similarly, if the matter has already been decided, the test is one which requires no conclusion about what factors actually influenced the outcome. No attempt need be made to inquire into the actual thought processes of the judge or juror.
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.

[32]Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337, 345 [7]-[8] (Callinan J agreeing at 396 [182]) (emphasis in original). As to the two step test, see also Charisteas v Charisteas [2021] HCA 29; (2021) 393 ALR 389, 393 [11] (Kiefel CJ, Gageler, Keane, Gordon and Gleeson JJ).

That the test to be applied is that stated in Ebner is not in issue. What is in issue is the application of the test to the facts.[33] As the Australian Law Reform Commission recently observed, the application of the test to particular facts is ‘acutely context sensitive’.[34] There may often be limited value gained from other cases.[35]
[33]The application of the test to particular facts may be ‘far from clear’: Kirby v Centro Properties Ltd (No 2) [2008] FCA 1657; (2008) 172 FCR 376, 382 [17] (Finkelstein J).
[34]Australian Law Reform Commission, Without Fear or Favour: Judicial Impartiality and the Law on Bias (Report No 138, December 2021) 88 [3.18] quoting Mark Aronson, Matthew Groves and Greg Weeks, Judicial Review of Administrative Action and Government Liability (Thomson Reuters, 6th ed, 2017) 656.
[35]Ibid.

In Australian National Industries Ltd v Spedley Securities Ltd (in liq) (‘Spedley’),[36] Mahoney JA (with whom Meagher JA agreed) distilled four principles from the authorities concerning the pre-judgment of issues in a proceeding:[37]

(a)the disqualification of a judge for apprehended pre-judgment depends on form rather than substance;
(b)whether there is an unacceptable appearance of pre-judgment is to be decided, not according to likelihood, but according to possibility;
(c)it is to be judged, not according to what the court and the parties know, but according to the impressions of a lay person who does not know the facts; and
(d)there will be an unacceptable appearance of pre-judgment if the judge has previously dealt with the issue of fact or credibility which is before him in the instant case.

[36](1992) 26 NSWLR 411.

[37]Ibid 438.

The task is to decide whether or not GWW’s claim of apprehended bias is ‘firmly established’, as must be the case for an order to be made.[38] ‘It is not enough that the reasonable bystander has a vague sense of unease or disquiet’.[39]
[38]R v Lusink; Ex parte Shaw (1980) 32 ALR 47, 50 (Gibbs J); Minister for Immigration and Multicultural Affairs v JiaLegeng [2001] HCA 17; (2001) 205 CLR 507, 549 [135] (Kirby J); State of Victoria v Psaila [1999] VSCA 193, [28], [37] (Brooking JA), [47] (Ormiston JA); Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1990) 170 CLR 70, 100 (Gaudron and McHugh JJ).
[39]Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17; (2001) 205 CLR 507, 549 [135] (Kirby J).

As noted by Gleeson CJ and Gummow J in Minister for Immigration and Multicultural Affairs v Jia Legeng (‘Jia’),[40] it is important to bear in mind that:[41]

The question is not whether a decision-maker’s mind is blank, it is whether it is open to persuasion.
…
The state of mind described as bias in the form of prejudgment is one so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented.

[40][2001] HCA 17; (2001) 205 CLR 507.

[41]Ibid 531-532 [71]-[72] (Hayne J agreeing at 561 [176]). See also McGovern v Ku-ring-gai Council [2008] NSWCA 209; (2008) 72 NSWLR 504, 509 [23] (Spigelman CJ).

Much has been said in the cases concerning the observer.

In Charisteas v Charisteas,[42] the High Court emphasised that:[43]

The hypothetical observer is a standard by which the courts address what may appear to the public served by the courts to be a departure from standards of impartiality and independence which are essential to the maintenance of public confidence in the judicial system.

[42][2021] HCA 29; (2021) 393 ALR 389.

[43]Ibid 395 [21] (Kiefel CJ, Gageler, Keane, Gordon and Gleeson JJ) (citations omitted).

In Johnson v Johnson (‘Johnson’),[44] Kirby J described the qualities of the observer:[45]

The attributes of the fictitious bystander to whom courts defer have therefore been variously stated. 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. The bystander would be taken to know commonplace things, such as the fact that adjudicators sometimes say, or do, things that they might later wish they had not, without necessarily disqualifying themselves from continuing to exercise their powers. The bystander must also now be taken to have, at least in a very general way, some knowledge of the fact that an adjudicator may properly adopt reasonable efforts to confine proceedings within appropriate limits and to ensure that time is not wasted. The fictitious bystander will also be aware of the strong professional pressures on adjudicators (reinforced by the facilities of appeal and review) to uphold traditions of integrity and impartiality. Acting reasonably, the fictitious bystander would not reach a hasty conclusion based on the appearance evoked by an isolated episode of temper or remarks to the parties or their representatives, which was taken out of context. Finally, a reasonable member of the public is neither complacent nor unduly sensitive or suspicious.

[44][2000] HCA 48; (2000) 201 CLR 488.

[45]Ibid 508-509 [53] (citations omitted).

In Vakauta v Kelly (‘Vakauta’),[46] Toohey J said:[47]

[T]he public perception of the judiciary is not advanced by attributing to the reasonable or fair minded observer a knowledge of the law and an awareness of the judicial process that ordinary experience suggests not to be the case. …As to the level of sophistication that should be attributed to the reasonable or fair-minded observer, see Kirby P in S & M Motor Repairs v Caltex Oil.

[46][1989] HCA 44; (1989) 167 CLR 568.

[47]Ibid 585 (citations omitted).

In Spedley, Kirby P (as his Honour then was), after referring to Vakauta, said:[48]

In Vakauta, Toohey J appears to have approved of my observations in S & M Motors (although in dissent) that care should be taken against attributing to the hypothetical reasonable observer a level of sophistication which may be enjoyed by judges and other lawyers (or by specially educated or informed citizens or even by the parties involved). I adhere to what I said in S & M Motors. I repeated it in Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd (No 9). In respect of the decision in that case, the High Court of Australia refused special leave to appeal.
I observed:
…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 the lengthy rumination about the legal or other merits of it.

[48]Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 411, 419-420 (citations omitted).

In Webb, Deane J identified four distinct, although at times overlapping, main categories of ostensible bias cases:[49]

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 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 and consists of cases where knowledge of some prejudicial but inadmissible fact or circumstance gives rise to the apprehension of bias.

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

GWW relies on the second category; conduct. It referred to DGB18 v Minister for Home Affairs[50] as an example of disqualification based on conduct. In that case, the failure to address the grounds and contentions advanced on behalf of the appellants was found by Wigney J to be a matter that might support a finding of apprehended bias, as might inadequacy of the reasons of the primary judge. His Honour said:[51]

There is, for the reasons already given, some merit in the contention that the primary judge ignored or failed to consider the case advanced on behalf of the appellants that they would be unable or unwilling to accept the constrained or “contaminated” Christianity practised in registered churches in China. On one view, at least, the fact that the primary judge failed to address this aspect of the appellants’ case might support a finding of apprehended bias. So too would the general inadequacy of the primary judge’s reasons. A fair-minded observer or bystander might well reasonably apprehend that the judge might not have brought an impartial mind to the resolution of the case at hand if the judge’s reasons do not address all of the grounds and contentions advanced by an applicant, or purport to answer those grounds and arguments with broad and generic conclusions or statements of principle.

[50][2019] FCA 1034.

[51]Ibid [105].

In a recusal application based on conduct, an accumulation of conduct may be relied upon. That is the way GWW put its application in this case.

In State of Victoria v Psaila (‘Psaila’),[52] Brooking JA accepted that, in the case of alleged disqualification by conduct, regard may be had to events occurring after the judicial officer whose conduct was sought to be impugned had finally determined the proceedings:[53]

I see no reason in principle why, where ostensible bias by reason of conduct is alleged, the conduct which is said to suggest lack of impartiality may not take place before, during or after the proceedings. Indeed, I do not see why the ostensible bias should not be found, for example, wholly in statements made before the proceedings had begun, or wholly in statements made after they had concluded. … provided always of course that the subsequent conduct relied on can rationally be said to bear upon whether the judicial officer was likely to decide the earlier case without bias. When I speak of conduct I of course include statements; indeed, the conduct will usually take that form. ...

[52][1999] VSCA 193.

[53]State of Victoria v Psaila [1999] VSCA 193, [32].

GWW placed particular reliance on Antoun v The Queen (‘Antoun’)[54] and AJH Lawyers Pty Ltd v Careri (‘AJH Lawyers’)[55] in support of its first ground. In both cases the refusal to consider submissions was held to amount to apprehended bias.
[54][2006] HCA 2; (2006) 224 ALR 51.
[55][2011] VSCA 425; (2011) 34 VR 236.

In Antoun, the trial judge indicated to counsel that a ‘no case’ submission would fail before it was made. Gleeson CJ said:[56]

[T]he trial judge announced his decision, in a peremptory manner, as soon as he was informed that an application would be made on the following day, and he repeated that decision before hearing any argument. He then listened to argument on sufferance, then repeated his decision. As it happens, his decision was right. The submission was without merit. That, however, does not remove the impression created by the course that was followed.

Hayne J said:[57]
For the moment, what is determinatively significant is that the trial judge said that a submission of no case to answer would be rejected without knowing what form that submission would take and without knowing in even the broadest outline what was said to be its basis. And having said that the submission would be rejected, the trial judge, after the case had been adjourned overnight, went out of his way when the case resumed to emphasise to counsel that he had meant what he had said. It was inevitable that a fair-minded lay observer might reasonably apprehend in this case that the judge might not bring an impartial mind to the resolution of the question that the judge was required to decide on the no case submission. And without knowing whether the no case submission would take the form of pointing to some alleged deficiency in the prosecution proofs or instead be directed to the weight of the evidence advanced by the prosecution, it was inevitable that the fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the final questions that the judge was called on to decide in the trial.

[56]Antoun v The Queen [2006] HCA 2; (2006) 224 ALR 51, 52 [2].

[57]Ibid 65 [56].

The Court of Appeal in AJH Lawyers described what occurred in that case as follows:[58]

In our view, a fair-minded lay observer might reasonably apprehend that her Honour might have prejudged Mr Sandbach’s recusal application. She announced her decision before Mr Sandbach could make any oral submissions. We acknowledge that the transcript suggests that Mr Sandbach had, at that point, already handed up his written submission. But the transcript invites the strong inference that her Honour had not read the submission before announcing her decision.

[58]AJH Lawyers Pty Ltd v Careri [2011] VSCA 425; (2011) 34 VR 236, 252 [57].

The conduct the subject of complaint in this case does not concern what happened during the hearing itself. The first complaint is focused on the Report which followed the stop-clock hearing and on the SR’s failure to refer to Chapters F and I of the General Section which, in light of the stop-clock nature of the hearing, assumed greater significance than might otherwise have been the case. The second complaint concerns conduct in the form of findings in the Report concerning witnesses anticipated to give evidence in the second phase of the reference.

Tedra sought to characterise GWW’s first complaint as a complaint about the adequacy of reasons, not amounting to a proper basis for an apprehended bias application. It submitted that not all cases where there has been a failure to refer to evidence or submissions will amount to a failure to give proper reasons.

In Whisprun Pty Ltd v Dixon (‘Whisprun’),[59] Gleeson CJ, McHugh and Gummow JJ said:[60]

A judge’s reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge’s failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party’s case.
… To suggest that a trial judge has not properly considered a party’s case is a serious charge. Such a suggestion should be accepted only when the record of the trial or other evidence persuasively suggests that the judge failed to discharge that paramount judicial duty.

[59][2003] HCA 48; (2003) 200 ALR 447.

[60]Ibid 464 [62]-[63].

In Prouten v Chapman,[61] the New South Wales Court of Appeal rejected an appeal on the ground of inadequate reasons. Brereton JA described the requirement to give reasons, including as follows:[62]

[I]t is appropriate to observe, at the outset, that, while the “minimum acceptable standard” for reasons is informed by the issues at trial, the nature of the evidence, the nature of the submissions, the scope of any right of appeal, and other relevant circumstances, the general scope of the duty to give reasons is to explain the decision, not to write an exhaustive treatise on every aspect of the trial. It is not necessary for written reasons to expose all of the detailed reasoning involved in arriving at the final judgment. A judge is not required to make express findings in respect of every matter of fact or law that has been raised in the proceedings. It is “plainly unnecessary for a judge to refer to all the evidence led in the proceedings or to indicate which of it is accepted or rejected”.

[61][2021] NSWCA 207.

[62]Ibid [32] (citations omitted).

The obligation of a special referee to give reasons is not the same as that of a judge. In Wenco, the Court of Appeal observed:[63]

It is to be remembered that the report of the referee is the report of an expert and not the judgment of a court. The report should be considered in that light and not subjected to any over-zealous attack. As was said by McDougall J in Chocolate Factory Apartments Ltd v Westpoint Finance Pty Ltd:
Referees should give reasons for their opinions so as to enable the parties, the Court and the disinterested observer to know that the conclusion is not arbitrary, or influenced by improper considerations; but that it is the result of a process of logic and the application of a considered mind to the factual circumstances proved. The reasoning process must be sufficiently disclosed so that the Court can be satisfied that the conclusions are based upon such an intellectual exercise.

[63]Wenco Industrial Pty Ltd v WW Industries Pty Ltd [2009] VSCA 191; (2009) 25 VR 119, 137 [47] (Redlich and Bongiorno JJA and Beach AJA) (citations omitted). See also Xuereb v Viola (1989) 18 NSWLR 453, 469 (Cole J).

As applies when considering the adequacy or otherwise of reasons, when determining whether the conduct complained of amounts to apparent bias, it is relevant to bear in mind the nature of the body whose conduct is sought to be impugned and also the character of the proceedings. In Re Refugee Review Tribunal, Ex parte H (‘Re Refugee Review Tribunal’),[64] Gleeson CJ, Gaudron and Gummow JJ said:[65]

However, the rule with respect to apprehended bias, as it has developed in relation to the judicial process, is not based solely on the concept of natural justice. Its development is also referable to the need to maintain confidence in the judicial process. Thus, the rule as to apprehended bias, when applied outside the judicial system, must take account of the different nature of the body or tribunal whose decision is in issue and the different character of its proceedings.
[64][2001] HCA 28; (2001) 179 ALR 425.
[65]Ibid 426-427 [5] (citations omitted).

E. The grounds for recusal relied upon by GWW
E.1 The grounds for recusal

GWW raises two primary grounds in support of its application:

(a) firstly, the SR failed or refused to consider GWW’s evidence or submissions; and

(b) secondly, the SR made findings concerning the witnesses that might affect his ability to bring an impartial mind to the second phase of the reference.

E.2 GWW’s overarching submissions

GWW’s overarching submission concerning the first ground states:[66]

GWW asks: might a fair-minded lay observer (FMLO) reasonably apprehend that the SR might not bring an impartial mind to the resolution of the questions in the Second Hearing upon learning that he had not considered, addressed and/or made reference to more than half of GWW’s 309-page General Section or the submissions contained therein, as well as much of GWW’s evidence, but nevertheless found generally in favour of TEDRA in the First Report?

[66]Greater Western Water Corporation, ‘Defendant’s Submissions Regarding Apprehended Bias’, 12 October 2022 (‘GWW Submissions’), [5].

GWW submitted that the SR displayed a repeated unwillingness to entertain or even consider key submissions as well as the evidence that it led. Accepting that the SR is not obliged to address every point advanced, GWW submitted that an accumulation of errors and failures against one party is sufficient to show ostensible bias. The extent to which its detailed submissions and evidence were ignored is so extensive and pervasive, ignoring vast swathes of GWW’s submissions, that it gives rise to the relevant apprehension.

GWW submitted there are two key reasons that the written closing submissions assumed great importance. The first, the stop-clock nature of the hearing, meaning that cross-examination of both lay and expert witnesses was necessarily truncated. Limited time only was available for oral closing submissions. The second, SR Letter 16, a lengthy letter containing the SR’s preliminary views which were either neutral or against GWW’s interests.

It submitted the importance of the written closing submissions was recognised by the SR in procedural directions requiring issues of admissibility of written evidence to be raised in written closing submissions for determination by the SR. It was also evident from the length and breadth of subject matter and content of the written closing submissions.

GWW submitted that the vast majority of the General Section having been ignored; whilst not as overt as the conduct of the trial judge in AJHLawyers or in Antoun, nonetheless satisfied the criteria in Ebner.

It submitted that while SR Letter 15 disclosed an intention to enable the parties to address the SR on individual claims during oral closing addresses, what was foreshadowed did not occur. During oral closing, most of the time was devoted to GWW pointing out to the SR why his preferred contractual construction was wrong. Very little time was spent on actual defects.

GWW submitted that upon reading the Report it becomes clear that the SR did not read the GWW submissions, entire sections of the General Section were ignored as if never made. The SR made one footnoted reference only to Chapter F, and no reference at all to Chapter I concerning expert evidence. The SR did not deal with GWW’s submissions regarding the admissibility of or the weight appropriate to be given to expert evidence, both topics addressed in Chapter I. That is the case despite the direction that any issues concerning the admissibility of written evidence shall be raised in submissions for determination by the SR. The SR never determined those objections.

GWW sought to establish its first ground by reference to nine ‘examples’ from the Report, as well as the aggregation of examples 1 – 9 (which I will refer to as ‘example 10’). In support of the first ground, GWW also relied on ‘incremental conduct’; the apprehension said to be revealed by the Recusal Hearing and the Recusal Ruling.

GWW submitted that the relevant apprehension of bias was amplified by the manner in which the SR dealt with the recusal application which was to, in large part, ignore and fail or refuse to address GWW’s submissions in the Recusal Ruling. At no point in the Recusal Ruling did the SR say that he had read the GWW written submissions. However, he did say:[67]

It is possible in these reasons that I have missed Incidents referred to in GWW’s written or oral submissions. I do not consider that is important. GWW submits the ten Issues it relies on are a non- inclusive list of the findings (Issues) and refers to examples (Incidents) of them. I do not speculate on what other Issues GWW might have with the Report, nor do I consider that if I have missed some examples (Incidents) that GWW points to, this would change my overall assessment.

[67]Recusal Ruling, [513] (emphasis in original).

In relation to the second ground, GWW submitted that the SR made findings concerning the witnesses that might affect his ability to bring an impartial mind to the second phase of the reference. It submitted that the SR:

(a) made numerous credit findings in respect of lay witnesses who will be required to give evidence in the second hearing;

(b) expressed his preference between all experts in all specialties in the first hearing; as well as

(c) without once considering GWW’s submissions.

E.3 Tedra’s response to the overarching submissions

As to the first ground, Tedra submitted the SR’s failure to refer to aspects of the General Section in the Report cannot give rise to an apprehension of bias because:

(a)the SR’s reasons are not inadequate, let alone inadequate in a way that gives rise to an apprehension of bias;
(b)in order to give rise to an apprehension of bias it would be necessary to infer from the failure to refer to aspects of the General Section that the SR not only failed due to inadvertence, but refused to consider those submissions. There is no basis for any such inference;
(c)the SR treated both parties equally in the manner in which he referred to their written submissions; and
(d)the SR was not under a duty to refer to every aspect of GWW’s submissions. To do so would have been practically impossible given the number of issues before him.

Tedra submitted that unlike Antoun and AJH Lawyers where apparent bias was sought to be established by reference to statements made by the decision-maker, here the alleged unwillingness on the part of the SR to consider GWW’s submissions or evidence must be established by inference. There is no proper basis for the drawing of such an inference.

Tedra submitted that GWW has not identified a single case where the failure to expressly refer to evidence or submissions has led to a finding of an apprehension of bias. Similarly, no single case where a failure to deal with objections to evidence has led to a finding of apparent bias has been identified. Antoun and AJH Lawyers did not concern a failure to refer to a party’s submissions in the decision-maker’s ruling – in both of those cases there was an overt refusal by the decision-maker to allow the party to make submissions at all.

Tedra submitted that the failure to refer to Chapters F and I of the General Section is at its highest a failure of reasons. The only way a failure to refer to a party’s submissions might appear as being not impartial is if the failure is so extensive and one-sided as to leave no reasonable alternative conclusion but that the failure arises from the decision-maker’s refusal to consider that party’s submissions. Tedra submitted that is not this case.

Tedra submitted that GWW must satisfy two independent thresholds:[68]

(a)First, that the Special Referee failed to refer to aspects of GWW’s submissions to which he was obliged to refer. If the Special Referee had no obligation to refer to particular aspects of GWW’s submissions, then the failure to do so cannot give rise to apprehended bias; and
(b)Second, that if there was such a failure, the failure arose from a “refusal to consider” those submissions, not merely some error or omission, as a result of which a fair-minded lay observer might be justified in apprehending that the Special Referee might “refuse to consider” GWW’s submissions at the next stage of the hearing.

[68]Tedra Submissions, [14].

It submitted that GWW is unable to satisfy either threshold. As to the first, the SR engaged in a thorough and detailed analysis of both parties’ submissions in respect of each alleged defect. It was not feasible for him to address every argument raised in GWW’s written submissions. As to the second threshold, there is no evidence that the SR refused to entertain or to consider GWW’s submissions.

Tedra submitted that the SR’s findings of 175 defect allegations, where he preferred GWW’s expert and lay evidence over Tedra’s evidence, and his finding that there are 21 defects which might be sufficiently serious to have prevented Tedra from reaching Practical Completion, are irreconcilable with the notion that the SR ignored GWW’s submissions.

As to the second ground, Tedra submitted that the SR’s findings with respect to GWW’s witnesses cannot give rise to apprehended bias because:

(a)those findings went only to the reliability of those witnesses’ evidence, not the witnesses’ credibility. The findings do not therefore cast doubt over the SR’s ability to fairly assess those witnesses’ evidence at the next stage;
(b)the findings were made in the context of a bifurcated hearing. It was always anticipated that the SR would hear a second stage after making findings in the first stage; and
(c)GWW has failed to apply the second stage of the test as to apprehended bias by failing to identify how any findings as to GWW’s witnesses might give rise to the apprehension of bias in the second stage of the reference.

The test for ostensible bias requires the Court to stand in the position of the observer. In particular, whether that person might reasonably apprehend that the SR might not bring an impartial mind to the resolution of the question.[69] Tedra submitted that the factual foundation for such a finding must be positively established by GWW and that that is not so in this case concerning either ground.
[69]Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337, 344 [6].

E.4 Findings concerning the overarching submissions

When considering the first ground, the observer would be conscious that the SR was not obliged to refer to all of the submissions and to all of the evidence in the Report and that the nine examples relied on by GWW are a tiny selection of extracts from the Report following the completion of the first phase of the reference. When scrutinising the adequacy of the SR’s reasons and the Report more broadly, the observer would also be conscious that the Report is not the judgment of a Court.[70]
[70]Wenco Industrial Pty Ltd v WW Industries Pty Ltd [2009] VSCA 191; (2009) 25 VR 119, 137 [47].

Wielding the ‘broad brush’ to which Kirby P (as his Honour then was) referred in Raybos Australia Pty Ltd v Tectran Corp Pty Ltd (No 9),[71] the observer would know that GWW makes no complaint about the manner in which the SR dealt with over 90% of its submissions, those parts of its submissions dealing with individual defects.
[71][1990] NSWCA 154.

The observer would be aware that the most critical part of GWW’s written closing submissions comprises the detailed defect by defect submissions making up over 3,400 pages of the submissions. The observer would be aware that those parts of the submissions are the most critical because of:

(a)the nature of the task to be performed by the SR; and
(b)the subject matter of the first phase, including the determination of whether Tedra is liable for each defect raised by GWW.

When evaluating GWW’s complaint of a refusal by the SR to consider Chapters F and I of the General Section of its submissions, the observer would be conscious of the ‘roadmap’ to GWW’s submissions set out in Section A.2 and to the statements against topics 2 and 9 in the sample tabular submission.

The observer would have read:

(a)the advice in Section A.2 that ‘General Submissions are cross-referenced throughout the defect-specific submissions whenever most applicable’;[72] and
(b)the statements found in the sample tabular submission reproduced at Annexure A. Against topic 2; ‘Submission cross-references’ the statement that ‘[s]ections of the General Submissions that are particularly relevant and relied upon for the individual defects are cross-referenced here’. Against topic 9; the statement that ‘[d]etails of CWW’s submissions for this particular defect. May include further references to other relevant defects or sections of the General Submissions’.[73]

[72]GWW Submissions for the SR, [13].

[73]GWW Submissions for the SR, [21], reproduced in Annexure A.

The observer would accept and would consider the application on the basis that the stop-clock nature of the hearing combined with the extraordinarily large number of defects in contention, and the fact that less than half of the alleged defects were touched on during the hearing itself, means that written closing submissions assumed particular significance.

Looking at the matter from a different perspective, the observer would appreciate that the ground 1 complaint is confined to a failure to refer to aspects of the General Section of GWW’s submissions not regarded by GWW, the author of those submissions, as ‘particularly relevant and relied upon’ concerning individual defects.

The observer would not accept GWW’s assertion that the SR ignored ‘vast swathes’ of its submissions.[74] Such a criticism would not be seen as a legitimate criticism given the ‘roadmap’ to which the SR’s attention was directed by GWW. For the ‘ignoring’ submissions to be a legitimate complaint, it would have been necessary for GWW to establish that the SR ignored the cross-references to the General Section of its submissions in the defect by defect sections of its submissions; but no such complaint is made, let alone made out.
[74]Transcript of Proceedings, Apprehended Bias Application Hearing, 5-6, 12 December 2022 (‘Transcript’), 18:24. The transcript incorrectly refers to ‘fast swags’ of GWW’s submissions. The reference should be to ‘vast swathes’ of GWW’s submissions.

The observer would reject GWW’s submissions that a failure to refer to Chapters F or I of the General Section constitutes an unwillingness to entertain or to consider ‘key’ submissions. To the extent what is stated in Chapters F or I is ‘key’, what is stated would have been repeated as part of or cross-referenced in the defects part of GWW’s submissions. Taken in the context of GWW’s own roadmap, the failure to refer is not at all consistent with the SR ignoring ‘key’ parts of Chapters F and I ‘as if … never made’.[75]
[75]As submitted in GWW Submissions, [12].

The observer would appreciate that GWW’s first ground relies on an inference being drawn that the SR did not read the submissions or evidence, and that the SR was unwilling to do so, having brought a closed mind to the first phase of the reference.

While not a lawyer, the observer is not wholly uninformed or uninstructed about the law.[76] The observer would be aware of the well-established principles concerning the drawing of inferences in civil cases conveniently summarised by the Court of Appeal in Masters Home Improvement Pty Ltd v North East Solution Pty Ltd (‘Masters’):[77]

The principles, relating to the drawing of inferences in civil cases, are well established. First, any inference must be based on facts established by admissible evidence. Secondly, the process of reasoning must constitute a valid inference, as distinct from speculation or guesswork. Thirdly, and importantly, where the inference is drawn in favour of the party which bears the burden of proof in the case, the conclusion must be ‘the more probable inference’ from those facts. In other words, the inference drawn by the judge must be reasonably considered to have a greater degree of likelihood than any competing inference. Fourthly, in determining whether an inference is to be drawn as a matter of probability, the tribunal of fact is not required to consider each primary fact, established by the evidence, in isolation. Rather, the Court considers the totality of those facts together, giving effect to their united and combined force.

[76]Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488, 508 [53] (Kirby J).

[77][2017] VSCA 88; (2017) 372 ALR 440, 466 [101] (citations omitted).

Applying the test in Masters, the observer would not be persuaded that the more probable inference to be drawn from the failure by the SR to refer to Chapters F and I of the General Section was because the SR refused to consider those parts of the submissions. The observer would be conscious that it is open to infer that the SR read the General Section, including Section A.2, paragraph 21, and the explanations provided in Annexure A topics 2 and 9, and proceeded accordingly. The observer would not be persuaded that the inference for which GWW contends has a greater degree of likelihood than the competing inference, one which is consistent with the SR proceeding in the manner urged upon him by GWW.

The observer would be aware that the Report did not discuss or rule on GWW’s objections to written evidence. The observer would be aware that, of the examples relied on by GWW, examples 3 (Dr Baigent) and 4 (Mr Azar) concern objections to the admissibility/weight to be afforded to expert evidence, and examples 5, 7 and 8 concern GWW’s submissions concerning the evidence of Mr D’Agostin, Mr Ruiperez and Mr Sola.

The observer would know that expert evidence was given in a series of conclaves and would be aware of the manner in which the cross-examination of Dr Baigent proceeded as discussed below concerning example 3. For the reasons discussed below, the observer would not have concerns that, in the case of Dr Baigent, a failure to rule on the objection to admissibility in the Report might be indicative of bias on the part of the SR. The same is the case concerning the example of Mr Azar’s expert evidence.

The observer would consider each of examples 4, 5, 7 and 8 as discussed below. For the reasons separately discussed concerning those examples, the observer would not consider the SR might not have brought an unbiased mind to the task, even though written submissions made by GWW in the General Section were not referred to by the SR.

When considering whether a failure to rule on objections and to refer to submissions concerning them might give rise to a reasonable apprehension that the SR might have brought, or might not in the future bring, an unbiased mind to the reference, the observer would look to context and to the conduct of the reference as a whole, including the Report. On doing so, the observer would be aware that the SR determined the split of the two phases of the reference in favour of GWW’s submissions. The SR would note that the SR found there were 175 defects in Tedra’s work. The SR would not find an arguable case for apparent bias, notwithstanding the absence of rulings contemplated by the pre-trial directions.

The observer would have read the 9 August 2020 SR Letter 16 with the topic heading ‘Questions for Oral Closing’. The observer would be aware that 66 of the 102 numbered paragraphs in the letter were concerned with contract interpretation-related questions. The observer would be aware that, despite the SR’s preliminary views, contract interpretation issues were determined in the Report generally in GWW’s favour. The observer would regard the fact the SR changed his preliminary views on contract interpretation issues in a manner favourable to GWW as inconsistent with him bringing a mind biased against GWW to the Report writing task.

Contrary to GWW’s submissions, it is not the case that SR Letter 15 disclosed, and the observer would not have read that letter as disclosing, an intention to enable the parties to address the SR on individual claims during the oral hearing. It said nothing of the sort. Nor did it imply that the oral hearing would be directed to individual claims.

SR Letter 15 is a summary of the 12^th Procedural Conference held on 5 March 2020. The observer would have read SR Letter 15 as reporting primarily on the subject matter of the conference and fixing the dates for oral closings taking into account the availability of senior counsel for both parties. SR Letter 15 foreshadowed that the SR would provide the parties with ‘specific issues that trouble [him]’. That is what SR Letter 16 later did.

Discussing Mr Fraser’s evidence in detail under the headings set out above, on some occasions the SR said that he accepted Mr Fraser’s evidence, for example, his ‘straightforward answer’.[208] He did not, however, accept all of his evidence, stating that there were some ‘troubling aspects to his evidence notwithstanding … [the SR’s] general acceptance of it and his motivations’.[209]
[208]Report, Part C, [104]; see also at [107].
[209]Report, Part C, [106].

Concerning the question of who had prepared the GWW defects register and managed that register, the SR found Mr Fraser’s answers to be somewhat inconsistent with his witness statement. He found the vagueness Mr Fraser expressed in his statement about concern with the state of Tedra’s works and his unfamiliarity with the defects register ‘troubling’.[210] He found the references to such concern about the quality of the works in February – March 2014 in Mr Fraser’s statement, and GWW’s submissions that there were (valid) serious concerns, not to be supported by the contemporaneous documents to which Mr Fraser referred.
[210]Report, Part C, [138].

Mr Fraser was cross-examined about an email exchange with Mr Baggeridge. The SR found that the email did not suggest that Mr Fraser and Mr Baggeridge had colluded. He found Mr Fraser’s evidence on that topic to have been ‘straightforward and credible’.[211] As to cross-examination of Mr Fraser on the commissioning plan, the SR said that he found Mr Fraser’s explanation ‘difficult to accept’,[212] setting out his reasons in the Report for holding that view.
[211]Report, Part C, [152].
[212]Report, Part C, [157].

As appears from this discussion of the references to Mr Fraser in the Report, the SR’s treatment of the evidence of Mr Fraser was careful, measured and considered. There is no suggestion of any lack of honesty on the part of Mr Fraser.

The SR concluded his discussion of Mr Fraser’s evidence with the following statement:[213]

While there were several aspects of Mr Fraser’s performance as commissioning manager that were troubling, overall I formed the view Mr Fraser was [a] straightforward and credible witness. I regarded his evidence to be of weight but sometime[s] requiring close examination to get an understanding of the relevant facts.

[213]Report, Part C, [165].

There is nothing in the discussion of Mr Fraser’s evidence in Part C of the Report which would give rise to any concern on the part of the observer that the SR may not bring an impartial mind to bear should Mr Fraser give evidence in the second phase of the reference.

As to Mr Kumar, in Part C of the Report, the SR described him as the ‘main lay witness for defects post termination’.[214] He noted that whilst Mr Kumar’s statement contained helpful references to hyperlinked documents, it contained generally unhelpfully vague descriptions of alleged defects. The SR reported that it was unclear from Mr Kumar’s statement whether he had direct knowledge about any defects, although he relied on others without making that clear.
[214]Report, Part C, [87].

The SR went on to observe:[215]

On cross examination, Mr Kumar did not improve the situation. Under cross examination, I formed the view Mr Kumar’s evidence was not of great weight. He did not appear to personally have carried out a thorough investigation of any of the defects he was taken to.

[215]Report, Part C, [91] (citations omitted).

The SR is not required to bring a ‘blank’ mind to the second phase, he is required to bring a mind that is open to persuasion. Nothing about his conclusion concerning Mr Kumar’s evidence in the Report on completion of the first phase of the reference would cause the observer any concern that the SR would not bring a mind that is open to persuasion to any evidence that Mr Kumar might give in the second phase.

The discussion of Mr D’Agostin’s evidence in Part C of the Report was under the headings ‘Background’ and ‘The weight of Mr D’Agostin’s evidence’.

The SR said that reviewing Mr D’Agostin’s cross-examination and the challenges made to factual statements included in his written statement, he formed the view that Mr D’Agostin’s evidence had to be treated with some caution. He proceeded to set out the ‘several reasons’ why he formed that view.[216] They included that it appeared to the SR that Mr D’Agostin saw his role was to argue a case for GWW and that Mr D’Agostin had not referred to basic documents underlying references in his statement, even though it was highly probable he was aware of at least some of those documents that were contrary to some of the defects he gave lay evidence about.
[216]Report, Part C, [34]ff.

In Part C, the SR reported that it appeared to him that Mr D’Agostin saw his role as finding defects because that is what GWW had employed his organisation to do, rather than to present all relevant evidence in relation to a defect. That perception by the witness of his role was regarded by the SR as a significant limitation in relying on his lay evidence.

The SR observed that while Mr D’Agostin had relied on others in preparing his statement, he had not acknowledged that fact. He appeared to be inclined to exaggerate the observation of defects without a proper basis.

Noting that Mr D’Agostin’s statement extended to over 1,500 pages and dealt with many defects, the SR reported that his overall impression of Mr D’Agostin’s evidence on cross-examination was that it was ‘not particularly reliable’.[217] The SR reported that he ‘had the impression Mr D’Agostin was overly keen to support defect allegations without a proper investigation’.[218] The SR referred to his assessment of Mr D’Agostin’s evidence on individual defects as contained in Parts D – I of the Report. He found that, like Mr Fraser, Mr D’Agostin seemed to take the view it was for Tedra to disprove a defect allegation, rather than for GWW to prove it.
[217]Report, Part C, [50].
[218]Report, Part C, [50].

In conclusion concerning Mr D’Agostin, the SR stated:[219]

Mr D’Agostin was credible in the sense that I had no sense he misrepresented what he saw. He endeavoured to be honest and truthful on what he gave evidence on. However, I did not find his evidence, generally, to be very persuasive.

[219]Report, Part C, [54].

Having reviewed the discussion of Mr D’Agostin as a witness in Part C of the Report, including the concluding paragraph of that discussion, there is nothing in the discussion of Mr D’Agostin’s evidence which would cause the observer to consider that the SR’s mind would not or might not be open to persuasion in relation to this witness’s evidence, should he give further evidence in the phase two hearing.

In summary, contrary to GWW’s submissions, it is not the case concerning the three witnesses to whose evidence attention was directed that there were ‘numerous credit findings’ in the Report.[220]
[220]As submitted at GWW Submissions, [156(a)].

It is also the case that no ‘credit findings’ were drawn to the Court’s attention concerning any expert witness.

Although ground 2 raises in a general way a complaint about findings by the SR concerning expert evidence in the Report, no particular examples of findings, whether concerning credibility or reliability of expert evidence, were identified by GWW in either its written or oral submissions. Contrary to its submissions, GWW did not establish that the SR ‘expressed his preference between all experts in all specialties’ in the Report.[221] GWW bears the burden. It has failed to discharge the burden so far as expert evidence is concerned.
[221]As submitted at GWW Submissions, [156(b)].

G.7 Findings concerning the Second Ground

Ground 2 fails because the observer would not have concerns due to credibility or reliability findings made in the Report that the SR might not bring an impartial mind to the second phase of the reference. That is so concerning both lay and expert witnesses.

Disposition

Standing back from the detail of the examples in support of ground 1 and reading Part C and the balance of the Report with the substance of grounds 1 and 2 firmly in mind, and applying the level of sophistication attributed to the fair minded lay observer, the overwhelming impression of the Report is of an even handed, impartial and diligent consideration of the issues the subject of the reference.

While an enormous amount of time and resources of the parties, and of the Court, has been taken up by this application and it has been necessary to consider all of the arguments in detail, there is no substance to either ground.

The application that the SR be disqualified from further conducting the reference on account of apprehended bias is dismissed.

The parties should seek to agree on appropriate orders as to costs. If orders dismissing the application and as to costs are agreed, they should be provided to my chambers by 4:00pm on 9 March 2023. If the parties are unable to agree, then by 4:00pm on 13 March 2023, Tedra should provide a draft order for which it contends, together with submissions of no more than four pages. By 4:00pm on 15 March 2023, GWW should provide a draft order for which it contends, together with submissions of no more than four pages. Unless otherwise advised, outstanding issues as to costs or otherwise will be determined on the papers.

ANNEXURE A

[AW or SRP – No] AW-001		‘Item’ column from Evidence Matrix
‘Problem / Issue’ column from Evidence Matrix
1. Finding sought		1.1 This section sets out the finding that CWW submits the Special Referee ought to make in respect of each individual defect. 1.2. The key relevant contractual requirement is outlined here. 1.3. The specific breach, non-conformance, defect or omission in relation to that requirement is also identified. 1.4. For each defect, CWW has also identified the finding that the Special Referee ought to make with respect to its impact upon TEDRA’s ability to achieve Practical Completion, by setting out the relevant part or requirement in the definition of Practical Completion that has not been met, referred to as specific “Requirements” (eg Requirement A, Requirement B etc). Submissions regarding these requirements and the terminology adopted throughout the individual defect submissions for aspects of the Practical Completion definition is set out at Section D.1 of the General Submissions.
2. Submission cross-references		2.1. Sections of the General Submissions that are particularly relevant and relied upon for the individual defect are cross-referenced here, as well as other individual defect submissions that are relevant to this item, including where multiple allegations are substantively dealt with within the submission for a single item.[222]
3. Expert ratings		3.1. Details the rating given to the defect in terms of impact to practical completion and severity as given by Advisian. For example, ‘3’, “2” or “1” as described in the Advisian reports. 3.2. Details the opinion given on the defect by any non-Advisian CWW expert (if applicable).	3.3. Contains a summary of TEDRA’s expert’s opinion, i.e. whether item is a “minor defect” or “not a defect”.
CWW Expert	Advisian July 2018	References to Advisian July 2018 expert evidence from Evidence Matrix
	Advisian May 2017	References to Advisian May 2017 expert evidence from Evidence Matrix.
	[CWW Expert]	References to Cann, Cram, Du Chateau expert evidence from Evidence Matrix (if applicable).
TEDRA Expert	[TEDRA Expert	References to TEDRA expert evidence from Evidence Matrix.
CWW Lay	[CWW witness]	References to CWW lay evidence from Evidence Matrix (August 2016).
	[CWW witness]	References to CWW lay evidence from Evidence Matrix (December 2016 – May 2017).
	[CWW witness]	References to CWW lay evidence from Evidence Matrix (2018).
TEDRA Lay	[TEDRA lay witness]	References to TEDRA lay evidence from Evidence Matrix (2016-2017).	References to TEDRA lay evidence from Evidence Matrix (2018).
General Reqs Details general categorisation of defect allegation from CWW particulars and Evidence Matrix, by reference to general contractual warranties that CWW alleges have been breached. Eg Materials, plant and equipment Operability Safety Fit for Purpose Legislative Requirements		D&C Contract, Standards and Legislative Requirements Reference to specifications and standards from CWW Evidence Matrix and particulars Where additional provisions are referenced in this box, they are indicated in underline format.
CWW Defect Registers		If defect was notified during the Project, references to the clause 30.3 defect notice / register and allegation raised, including timing of CWW’s initial and subsequent notices (extracted from Evidence Matrix).
		Extract of key CWW responses to TEDRA in defect registers, namely: · 23 December 2014 (AW) [CWW.0227.0274.1668] “CWW's response to comments” column; · 21 January 2015 (SRP) [CWW.0227.0274.1758] “CWW's response to comments” column; · 18 February 2015 (SRP) [CWW.0227.0307.0104] “CWW's response dated February 2015” column; · 20 March 2015 (AW) [CWW.0201.0001.3893] “Rectification” column; · 15 June 2015 (AW) [CWW.0201.0007.5189] “CWW's Position June 2015” column; and · 5 August 2015 (SRP) [CWW.0201.0007.7164] “CWW Position” column.
TEDRA Responses		Where defect was notified during the Project, references to the TEDRA response to defect registers and allegation raised (extracted from Evidence Matrix).
		Extract of key TEDRA responses to CWW in defect registers, including terms of response / denial, namely: · 4 / 11 December 2014 [CWW.0222.0003.2992; CWW.0222.0004.2244] “Comments” and “Tedra comment” columns; · 13 March 2015 [CWW.0201.0001.3243] “Tedra’s Position” column; · 1 May 2015, “Tedra’s Further Comments” column: o SRP [CWW.0201.0001.3243]; o AW [CWW.0201.0001.8075]; · 25 September 2015 (Show Cause response), “CWW update” and “TEDRA’s response” columns: o SRP [CWW.0201.0003.5775]; o AW [CWW.0201.0003.5799]. These responses show that, even where TEDRA’s experts now concede that an item is defective, TEDRA made no such admission at the time it was in possession of the Works. The relevance of this is that even where a defect is a minor defect, TEDRA is unable to show that it had any reasonable grounds for failing to rectify the defect. Far from promising imminently to rectify any minor defects, TEDRA refused to rectify, and asserted that it was not obliged to do any more.
TEDRA Defences		Where TEDRA has included a specific defence in its pleadings or the Evidence Matrix, which defences are nominated by TEDRA as applicable to this allegation: · Contractor’s Proposal [where raised]; · Direction: extract from Evidence Matrix detailing ‘direction’ relied upon, else “N/A”; · Design submission: extract from Evidence Matrix detailing design submissions TEDRA says apply, else “N/A”; and · PPR: extract from Evidence Matrix detailing clause(s) of CD4 referred to by TEDRA, else “N/A”.
4. Key documents		4.1. Details key documents relevant to the particular defect, including contract documents, drawings, reports, correspondence etc.
5. Issues in dispute		5.1. Summary outline of the issues in dispute (including any key points of agreement and the defences raised on TEDRA’s pleadings) the resolution of which CWW considers will inform and guide the Special Referee’s determination.[223]
6. Lay evidence		6.1. Summary outline of the lay evidence relied upon by the parties for the item.
7. Expert evidence		7.1. Summary outline of the expert evidence relied upon by the parties for the item.
8. Oral evidence		8.1. Where applicable, references to the transcript where this defect was specifically addressed during the expert conclaves in the hearing (by reference to page numbers at bottom of the consolidated transcript). For some defects, provides a summary of relevant oral evidence. 8.2. Also identifies where multiple defects were discussed in aggregate. 8.3. Otherwise marked “N/A” to identfy that the allegation was not discussed in conclaves and the defect is being determined on the papers.
9. Submission		9.1. Details of CWW’s submissions for this particular defect. May include further references to other relevant defects or sections of the General Submissions.[224]
10. Photos		10.1. Includes extracts of photos and their source, where relevant and of assistance. 10.2. Dates referenced are generally the ‘date taken’ based on the metadata of the native photo.

[222]Emphasis added.

[223]Emphasis added.

[224]Emphasis added.

ANNEXURE B

1 SRP-767 Air conditioning unit installed in ceiling of SRP MCC is located above the switchboard and ACs have not been wired correctly
The ceiling mounted cassette type air conditioning unit in the SRP MCC room is located above the switchboard and presents a risk that water may leak onto the switchboard during normal operation. The current installation is a safety risk and does not permit servicing of the air conditioning unit. The contract requires that the Works are designed and constructed so as to allow the plant and equipment to be maintained. This installation has not been provided in accordance with the contract requirements. (See Synertec Final Report Section 2.4.12 [CWW.0158.0939.0911] at .0935) While investigating this allegation, further non-compliances with AS3000 were identified meaning that climate control devices were unfit for safe operation as installed, including: * earth wires taped with red insulation tape and used as active conductor * indoor AC units earthed to a nearby lighting circuit
1. Finding sought		1.1. The SRP D&C Contract requires (CD2, clause 4.1(g)) TEDRA to use workmanship of the standard prescribed in the SRP D&C Contract, or, to the extent it is not so prescribed, a standard consistent with the best industry standards for work of a nature similar to the Works. It requires compliance with AS 3000[225] and with the OH&S Act.[226] 1.2. AS 3000:2007,[227] section 5.5.2.2.1 requires ‘The protective earthing conductor for a circuit that is incorporated in the same cable sheath or wiring enclosure as the associated live conductors for the circuit shall only be used for the earthing of equipment supplied from the circuit.’ 1.3. AS 3000:2007, section 5.5.2.2.1 requires that a protective earthing conductor that originates at a distribution board, in accordance with Clause 5.5.2.1 (c) or (d), shall not be used for the earthing of electrical equipment that is supplied from another switchboard. 1.4. AS 3000:2007, section 1.7.2(f) requires that cables with green, yellow or green/yellow combination coloured insulation or sheathing shall not be used as live (active or neutral) conductors in installation wiring 1.5. The OHS Act (Vic) 2004, s 20(a), provides that "The concept of ensuring health and safety ...requires the person … to eliminate risks to health and safety, to reduce those risks so far as is reasonably practicable”. 1.6. In breach of the SRP D&C Contract, TEDRA failed to install the air-conditioning wiring in accordance with AS 3000 and OH&S Laws. Among other things, the installation of the air-conditioners uses green-yellow earth wires as active conductors and uses a lighting circuit to earth the Hitachi air-conditioners. 1.7. Based on the findings above, TEDRA was prevented from reaching Practical Completion because this item prevented the Works from being reasonably capable of being used for their stated purpose, contrary to Requirement A.
2. Submission cross-references		2.1. N/A.
3. Expert ratings		3.1. Clift rates this item as a Category 3 defect.	3.2. Muguira states this item is a minor defect, assuming the work was performed by TEDRA.
CWW Expert	Advisian July 2018	JCL2 [EXP.CWW.011.0001] Section 5.1.2.27 (pg 345-350)
	Advisian May 2017	JCL1A [EXP.CWW.010.0001] Annexure G - Item Assessment, item 767: PDF page 47 Annexure I - Item Opinion, item 767: PDF page 55 Aggregate SRP Electrical: Section 4.3.1 and table 4-4 (para 20, PDF pg 13): * Configuration / Controls Section 6 Compliance with General Contractual Requirements: * Section 6.1.1 Design and Workmanship (para 57, PDF pg 22) * Section 6.1.3 Fitness for purpose (para 61-62, PDF pg 23) * Section 6.1.4 Operability (para 63, PDF pg 23-24)
TEDRA Expert	Muguira	TM2u2 [EXP.TDW.016.0001] 65
Kennedy; McMahon	MKE [LAY.CWW.016.0001]; GM [LAY.CWW.018.0001] MKE: Section D.5 (para 214-215, PDF pg 51-52) GM: Synertec Report: Section 2.4.12 ([CWW.0158.0939.0911] at PDF pg 25, referenced at para 22, PDF pg 5 of statement)
Farmer; Dennis	JF [LAY.CWW.008.0001]; JD [LAY.CWW.005.0001] JF: Section E (para 37-50, PDF pg 9-12): evidence of further safety risks and non-compliant electrical installation associated with HVAC units identified as a result of investigations with respect to location of unit. * Annexure B (PDF pg 33-38): HVAC Report on non-compliances with AS3000 [CWW.2323.0006.0020] JD: Review of existing HVAC Installation in SRP MCC. * Annexure A (PDF pg 10-19): HVAC report on heat loads [CWW.2323.0001.0001] * Note para 34 (pg 9) in relation to JR4 response to SRP 502 (PDF pg 192-194) - all three HVAC units required to cool SRP MCC room
TEDRA Lay	Ruiperez	JR4u2 [LAY.TDW.008.0001] 308		JR7u1 [LAY.TDW.011.0001] Page 52, Section C.2
General Reqs Materials, Plant and Equipment; Fit for purpose; Design; Operability; Safety		D&C Contract, Standards and Legislative Requirements CWC 1619, CD4, Part 1, Section 4, Design Requirements, Clause 4.1.1 Design objectives: "As a minimum, the design objectives include the following aspects, which shall also be deemed to be performance criteria: f) Plant operability and maintainability - provide a design that is intrinsically safe to operate and maintain" CWC 1619, CD4, Part 1, Section 4, Design Requirements, section 4.1.2 Design Features: "The features to be included in the design of the SRP shall, as a minimum, include: a) A plant layout with an efficient plant footprint, while providing all necessary clearances and access provisions for maintenance and operations activities, and accomodating all equipment required for the Stage 1 capacity;" CWC 1619, CD4, Part 1, Section 2, Performance Requirements, Section 2.1 Design Life "Electrical equipment required design life: 15 years"
TEDRA Defences		· Direction: N/A · Design submission: N/A · PPR: N/A
4. Key documents		4.1. The key documents in relation to this allegation are: (a) Synertec Final Report Section 2.4.12: [CWW.0158.0939.0911] at .0935 (GM, PDF pg 5); (b) Farmer investigation [CWW.2323.0006.0020], [CWW.2323.0006.0200]; (c) Eco Air installation plan [TDW.005.001.0953] at [TDW.005.001.0954; and (d) AS 3000 [CWW.0153.0001.0073].
5. Issues in dispute		5.1. There is no dispute that the wiring depicted in Mr Farmer’s witness statement is in breach of the required Australian standards. 5.2. The only issue is whether or not the work was wiring installed by TEDRA or its subcontractors. 5.3. CWW’s shows a consistent means of wiring Hitachi air-conditioning units and that the means of wiring those units is in breach of AS 3000. 5.4. TEDRA claims and must prove that the work was not as installed by it. 5.5. TEDRA has not established these matters. CWW will respond to any submissions TEDRA makes on its case in this regard.
6. Lay evidence		6.1. There is no dispute that the wiring depicted in Mr Farmer’s witness statement[228] is in breach of the required Australian standards (see [0] below). 6.2. The only issue is whether or not the work was wiring installed by TEDRA or its subcontractors. 6.3. Mr Farmer’s evidence shows a consistent means of wiring Hitachi airconditioning units.[229] 6.4. Mr Ruiperez’s evidence shows that the Hitachi airconditioning units were originally installed by Eco Air and a Certificate of Electrical Safety issued for the installation, which was subsequently serviced.[230]
7. Expert evidence		7.1. Mr Muguira notes the electrical safety certificate issued after the initial airconditioning installation.[231] He states that it would be surprising for the airconditioning to be serviced as it was in 2015 and for the electrical maintenance person not to notice the breach of the wiring rules.[232] 7.2. Mr Muguira claims the defect is merely a minor defect.[233] 7.3. Mr Clift’s opinion is that there is no practical reason for CWW or their Contractors to have altered this circuit, and accordingly he assumes it to be as left by TEDRA.[234] 7.4. Mr Clift considers the wiring defect is also one that contravenes fundamental safety principles prescribed by AS3000, and whilst it was identified prior to any incident occurring, this was only because of CWW’s concern for the veracity of the broader electrical installation.[235] 7.5. In addition, simulation studies undertaken by GHD [CWW.2323.0001.0001] demonstrate that all three air conditioning units associated with the SRP MCC room are needed to adequately cater for heat loading of the electrical loads in that room. Consequently, under conditions of maximum demand and high ambient temperature, it is possible for SRP MCC room over temperature conditions to occur as a result of this air conditioner being out of service.[236] 7.6. Accordingly, Mr Clift considers the defect critical.[237]
8. Oral evidence		8.1. This allegation was discussed at pages 1208-1216 of the transcript [TRA.500.007.0001].
9. Submission		9.1. The main issue here is the problem with the wiring of the air-conditioning units. 9.2. As indicated in the defect description, the issue is widespread. While the issue was first identified in relation to the Hitachi AC above the SRP MCC as identified in [CWW.2323.0006.0020], it extends to other units wired by the same TEDRA subcontractor. 9.3. Mr Farmer’s statement sets out Lendlease’s investigations of 19 AC units.[238] All had issues. Some related to labelling problems, in others cabling was the wrong colour for a 3-phase system; still others had undersized circuit-breakers. 9.4. Four units had a wiring scheme had: (a) earthed the AC unit to a nearby lighting circuit, in breach of AS/NZS3000,5.5.2.2.1; and (b) had the earth wire taped with red insulation tape and used as active conductor, in breach of AS/NZS3000, 3.8.2 7 & 1.7.2 f. 9.5. The Lendlease report identifies these ACs as being SRP MCC Centre, SRP Office Foyer, SRP Office Lab and SRP Office Lunch Room.[239] 9.6. That appears to square with the position of the air-conditioners installed by EcoAir, TEDRA’s subcontractor, as shown in its plan TDW.005.001.0954 referred to by Mr Ruiperez. 9.7. In other words, this is a common problem with a particular installation by a particular contractor. 9.8. Mr Muguira did not consider Mr Farmer’s evidence of the problems with the other Hitachi AC units; nor did Mr Ruiperez. 9.9. Mr Ruiperez relies on the Hitachi manual to attempt show that the air conditioner ‘could not work’ if wired the way it was depicted in Mr Farmer’s photograph. However, that opinion can be disregarded: (a) it is an opinion not based on any expertise, and inadmissible; (b) it is not backed up by either electrical expert. Neither expert expressed a view that the AC would not work when wired this way; (c) if Mr Ruiperez is right, none of the four Hitachi AC units would have worked. There is no evidence of this; (d) Mr Ruiperez does not know the connections of the wires at the other end. Mr Farmer, who investigated the issue and identified the problem, does; and (e) Mr Ruiperez relies on page 22 of the Hitachi manual. That page does not show the correct wiring scheme for Australia: it states as much on that page.[240] Impact to Practical Completion 9.10. Mr Muguira accepts that the wiring photographed in the air conditioning unit is a defect, but considers it to be a minor defect. 9.11. It is unclear what the basis is for considering that the taping / use of the earth wire as an active conductor is a minor defect. A non-compliance to AS3000 5.5.2.2.1 is a safety issue. Mr Muguira appears to accept that the taping / use of the earth wire as an active conductor is not in conformance with AS3000. AS3000 is a safety standard; compliance is mandatory. There is no proper basis for concluding this is anything other than a serious defect. 9.12. Mr Clift states that the wiring defect contravenes fundamental safety principles prescribed by AS3000.[241] Mr Clift’s opinion should be preferred.
10.Photos		10.1. Extract from HVAC Inspection Report [CWW.2323.0006.0020] at .0021 showing earth wire taped with red insulation tape and used as active conductor.

[225]See, eg, SRP D&C Contract, CD4, Vol 2, Part 1, Section 4 (Electrical Works) [CWW.0101.0697.0782] at PDF p 147, Part 3.1 PDF p 252; Part 3.6, Section 6.1, PDF p 373.

[226]SRP D&C Contract, CD2, clause 51(f) [CWW.0101.0697.0782] at PDF p 90.

[227]CWW.0153.0001.0073] at [CWW.0153.0001.0128] PDF p 56.

[228]JF [LAY.CWW.008.0001] PDF p 35.

[229]JF [LAY.CWW.008.0001] PDF pp 9-12 [37]-[50].

[230]JR4u2 [LAY.TDW.008.0001] PDF p 308 [6]. See also [TDW.206.003.0103].

[231]TM2u2 [EXP.TDW.016.0001] PDF p 67.

[232]TM2u2 [EXP.TDW.016.0001] PDF p 67.

[233]TM2u2 [EXP.TDW.016.0001] PDF p 69.

[234]JCL2 [EXP.CWW.011.0001] PDF p 348 [1443].

[235]JCL2 [EXP.CWW.011.0001] PDF p 348 [1442].

[236]JCL2 [EXP.CWW.011.0001] PDF p 349 [1445].

[237]JCL2 [EXP.CWW.011.0001] PDF p 350 [1451].

[238][CWW.2323.0006.0200]; JF [LAY.CWW.008.0001] PDF pp 10-12 [41]-[49].

[239][CWW.2323.0006.0200], Rows 1, 6, 8 and 9. See cells G2, H2, E7, H7, E9, H9, E10, H10.

[240][TDW.045.001.1035] PDF p 26, p 22.

[241]JCL2 [EXP.CWW.011.0001] PDF p 350 [1449].

[185]Both McIntosh v The Queen [2015] NSWCCA 184 and IMM v The Queen [2016] HCA 14; (2016) 257 CLR 300 were referred to by GWW in Greater Western Water Corporation, ‘GWW’s Reply Submissions in Respect of Apprehended Bias Application’, 22 April 2022, [104].

[2023] VSC 96

2 March 2023