Federal Court of Australia United Petroleum Pty Ltd v Perth Airport Pty Ltd [2025] FCA 40 File number(s): VID 260 of 2022 Judgment of: O'CALLAGHAN J Date of judgment: 5 February 2025 Catchwords: PRACTICE AND PROCEDURE — recusal — reasonable apprehension of bias — whether fair-minded lay observer might reasonably apprehend that judge might not bring an impartial mind to the hearing of the proceeding Cases cited: Charisteas v Charisteas (2021) 273 CLR 289 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 Fried v National Australia Bank Ltd [2000] FCA 787 GetSwift Ltd v Webb (2021) 283 FCR 328 Trustees of Christian Brothers v Cardone (1995) 57 FCR 327 Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 16 Date of hearing: 4 February 2025 Counsel for the Applicants: N De Young KC with S Jenkins Solicitor for the Applicants: Norton Rose Fulbright Australia Counsel for the Respondent: J Taylor SC with P Walker Solicitor for the Respondent: Allens ORDERS VID 260 of 2022 BETWEEN: UNITED PETROLEUM PTY LTD (ACN 085 779 255) First Applicant UNITED PETROLEUM AUSTRALIA PTY LTD (ACN 164 398 832) Second Applicant AND: PERTH AIRPORT PTY LTD (ACN 077 153 130) Respondent order made by: O'CALLAGHAN J DATE OF ORDER: 5 FEBRUARY 2025 THE COURT ORDERS THAT: 1. The trial before the Court as presently constituted be vacated. 2. The proceeding be referred to mediation by Senior National Judicial Registrar Legge on a date to be fixed. 3. If the proceeding does not resolve at mediation, it be listed for trial before another judge of the Court to commence on a date to be fixed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT O'CALLAGHAN J 1 This proceeding is set down for a 12 day trial commencing on 12 February 2025. 2 On 30 January 2025, I became aware that one of the applicants' witnesses is someone with whom I have had a personal and professional relationship. 3 As a result, I convened a case management hearing which was held yesterday. 4 As I indicated at that hearing, I am obliged to recuse myself from hearing the trial. These are my reasons. 5 The principles surrounding the apprehension of bias are well established. See Charisteas v Charisteas (2021) 273 CLR 289 at 296 [11]. A plurality of the High Court summarised them in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 344–345 [6]–[8] (Gleeson CJ, McHugh, Gummow and Hayne JJ) as follows: Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), as here, the governing principle is that, subject to qualifications … 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. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle. 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. (Citations omitted.) 6 Where there is real doubt as to whether the circumstances require judicial disqualification, it is preferable for judicial officers to err on the side of caution by electing to recuse themselves. While cautioning against judges being too willing to accede to insubstantial objections to their sittings, the plurality in Ebner noted at 348 [20] that: [t]his is not to say that it is improper for a judge to decline to sit unless the judge affirmatively concluded that he or she is disqualified. In a case of real doubt, it will often be prudent for a judge to decide not to sit in order to avoid the inconvenience that could result if an appellate court were to take a different view on the matter of disqualification. … 7 The conclusion that there is a reasonable apprehension of bias does not involve any prediction by the court as to whether a judge might not bring an impartial mind to bear or any question as to the understanding or motivation of the particular judge. See Charisteas at 299 [18]. The court's concern to prevent bias, even if apprehended and not actual, from influencing the decision-making process is instead based on the recognition that there may be subconscious influences on judicial officers when deciding cases. As the Full Court of the Federal Court explained in GetSwift Ltd v Webb (2021) 283 FCR 328 at 339 [39]: Importantly, and we think determinatively in this appeal, it is to be recalled that even where a decision-maker has not consciously considered the extraneous information, a reasonable apprehension of bias can arise because of its "subconscious" influence: CNY17 at [27]-[28] (Kiefel CJ and Gageler); [51], [92], [97] (Nettle and Gordon JJ); [111] (Edelman J). Where there is a risk of subconscious bias "that risk cannot be cured by putting the information aside": CNY17 at [97] (Nettle and Gordon JJ). Because "reason cannot control the subconscious influence of feelings of which it is unaware [where] there is ground for believing that such unconscious feelings may operate in the ultimate judgment, or may not unfairly lead others to believe they are operating, judges recuse themselves": Public Utilities Commission of the District of Columbia v Pollak (1952) 343 US 451 at 466-467 (Pollak). In CNY17, Kiefel CJ and Gageler J (at [27]) set out the following extract from Pollak (at 466-467): " … The fact is that judges do lay aside private views in discharging their judicial functions. This is achieved through training, professional habits, self-discipline and that fortunate alchemy by which men are loyal to the obligation with which they are entrusted. But is also true that reason cannot control the subconscious influence of feelings of which it is unaware. When there is ground for believing that such unconscious feelings may operate in the ultimate judgment, or may not unfairly lead others to believe they are operating, judges recuse themselves. They do not sit in judgment. They do this for a variety of reasons. The guiding consideration is that the administration of justice should reasonably appear to be disinterested as well as be so in fact." 8 The principles governing the apprehension of bias may apply not only in respect of associations between judicial officers and parties to litigation, but also in respect of associations between judicial officers and other persons concerned with the case, such as witnesses. See Ebner at 350 [30]. In Trustees of Christian Brothers v Cardone (1995) 57 FCR 327, Wilcox J observed at 336 that: [t]here is no general rule that a judge is disqualified from hearing a case in which a witness known to him or her will be called. … On the other hand, except perhaps in an emergency situation, it is clearly undesirable for a judge to hear a case in which a person well-known to him or her is to give important and controversial evidence, especially if the witnesses' credit may be in issue. It might be difficult for the judge to bring an open mind to the evaluation of that person's evidence. Between these two extremes lie countless intermediate points. The question whether a particular judge should hear a case, having regard to the judge's knowledge of a potential witness, is a matter to be evaluated in the light of the whole of the circumstances. … 9 In Fried v National Australia Bank Ltd [2000] FCA 787, the respondent made an application for Weinberg J to disqualify himself on the basis that his Honour's accountant, Mr Rado, being called to give evidence might give rise to a reasonable apprehension of bias. His Honour acceded to this application for the following reasons (at [60]–[62]): … I am satisfied that the hypothetical reasonable and fair-minded but "informed" observer might well entertain an apprehension that, in dealing with the evidence of Mr Rado, I might not bring to the task of assessing that evidence an impartial and unprejudiced mind. In arriving at this conclusion I have taken into account in particular the nature of the relationship which ordinarily exists between any individual and his or her accountant. That relationship, of course, involves the utmost trust. The fair-minded observer would be entitled to conclude that a client would normally regard his or her accountant as a person of integrity and would at least be disinclined to view him as dishonest. The evidence which Mr Rado is to give in this proceeding is not unconnected with his professional background and experience. It concerns his role as an accountant, and in particular his involvement over several years in the preparation of company accounts and tax returns for the applicants. Mr Rado has performed the same functions for me, and for my wife, for many years. I can well understand that a reasonable bystander might think that it would be difficult for me to avoid being subconsciously influenced by my long-standing association with him into accepting as truthful and accurate any evidence which he might give. 10 I turn now to the circumstances here. 11 On 29 January 2025, the applicants filed their outline of opening submissions, as a result of which I found out that the applicant intended to call Mr Gary Brinkworth to give lay evidence. Mr Brinkworth was the Chief Executive Officer of United Petroleum Pty Ltd from October 2016 until January 2020. 12 Having read those submissions, on 30 January 2025 I caused my associate to send to the parties the following email (omitting formal parts) explaining my personal and professional relationship with Mr Brinkworth: His Honour has read the applicant's outline of opening submissions filed on 29 January 2025. Those submissions say that the applicant intends to call Mr Gary Brinkworth to give lay evidence at the trial. Until today, his Honour was unaware of Mr Brinkworth's involvement in the proceeding. His Honour has asked that I inform the parties that his Honour was a member of the board of directors of Barristers' Chambers Limited for the entire period during which Mr Brinkworth was the Managing Director and Chief Executive Officer of BCL. His Honour was also part of the interviewing panel during the process of Mr Brinkworth's application for the position. During relevant times, his Honour was also the Junior Vice President, and then the Senior Vice President, of the Victorian Bar Council to which Mr Brinkworth regularly reported at Bar Council meetings. His Honour was thus in regular contact with Mr Brinkworth during the period that he occupied his role at BCL. He also had dealings with Mr Brinkworth arising out of the fact that both his Honour and Mr Brinkworth have a close family member with the same disability. In those circumstances, his Honour has asked me to inform the parties that his Honour would have significant difficulty hearing the matter if Mr Brinkworth's credibility is sought to be impugned at the trial. But in any event, his Honour wished to make the disclosures above to the parties as soon as possible. His Honour invites the parties to confer with respect to the disclosures contained in this email. If an agreed response cannot be reached, or if it is necessary for any other reason, his Honour will convene a case management hearing at the parties' convenience. 13 On the same day, my chambers received correspondence from the solicitors for the respondent stating (among other things) that, in light of the disclosures contained in the above correspondence, the respondent was of the view that I should not hear this case. 14 Given the history and nature of my personal and professional relationship with Mr Brinkworth outlined in the email above, I am satisfied that a fair-minded lay observer might reasonably apprehend that I might not bring an impartial mind to my consideration of the evidence provided by Mr Brinkworth. 15 As I indicated at the hearing yesterday, I am therefore obliged to recuse myself from hearing this proceeding. 16 I asked the parties yesterday whether they would agree to the matter being referred to mediation by Senior National Judicial Registrar Legge on or around 12 February (the date the trial was scheduled to commenced). My associate was subsequently informed that the applicants agree to such an order being made, but that the respondent takes a different view. In my view, it is appropriate that an order for mediation be made. If the matter does not resolve at mediation, it will be listed for trial before another judge of the Court on a date to be fixed. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Callaghan. Associate: Dated: 5 February 2025