Federal Court of Australia

Independent Commission Against Corruption v Waterhouse (Recusal) [2026] FCAFC 109

REASONS FOR JUDGMENT

MARKOVIC J:

1    By his submissions filed on 17 June 2026, Martin Otto Waterhouse seeks an order that I recuse myself from hearing and determining, as a member of the Full Court of this Court, the question of whether his interlocutory application described below should be removed from the Court file pursuant to r 2.28 of the Federal Court Rules 2011 (Cth). These reasons concern that application.

Background

2    Before proceeding it is necessary to set out the background to Mr Waterhouse’s application and the alleged instances of actual and/or apprehended bias that Mr Waterhouse relies upon to support his claim that I ought to recuse myself.

3    On 30 June 2025 the Independent Commission Against Corruption in New South Wales (ICAC) filed a creditor’s petition seeking an order for the sequestration of Mr Waterhouse’s estate relying upon debts that arose from unsatisfied costs orders made in proceedings in the Supreme Court of New South Wales and the New South Wales Court of Appeal.

4    On 5 December 2025 Mr Waterhouse filed an interlocutory application by which he contends that:

Interlocutory administrative orders that can only be made by the Court’s Chief Administrative Officer the Chief Justice pursuant to the Common Law practice and procedure for the appointment of acting judges from outside the jurisdiction to hear and determine the matter when the only court with jurisdiction and every judicial member of it is disqualified for apprehended bias… and/or

i.    is prohibited from perversely dealing with the matter by sect: 34 (4) of the Cth Crimes Act 1914 and/or the Common Law jurisprudence of the High Court in such cases as Ebner v the Official Trustee in Bankruptcy [2000] HCA 63…and

ii.    as was followed and applied in such cases as Heydon v NRMA Ltd & Ors [2000] NSW CA 374 heard by acting justices of appeal Malcolm, McPherson and Ormiston and the Western Australia July 2012 trial of Lloyd Raney for murder before acting Justice Brian Ross Martin…and

iii.    pursuant to the common law and constitutional and CCPR treaty [art:14.1] duty of the Federal Court to provide to the parties a court or tribunal constituted by law that is not only independent and impartial, but which is also seen by the public to be manifestly and undoubtedly truly independent and impartial and free of political influences and corruption.

The supporting evidence of which is very lengthy and which will necessitate a lengthy hearing to properly determine if the Court is not prepared to move on its own motion.

(Emphasis in original.)

5    In the interlocutory application Mr Waterhouse seeks orders, among others, that the “Federal Court of Australia is recused for apprehended bias and for other reasons” and that “[a]ll disputed … issues are adjourned until a specially arranged acting Federal Court Justice can be appointed by the Governor General at the request of the Attorney General and who is a suitably qualified jurist who is manifestly and undoubtedly beyond political influences and who is unquestionably truly independent and impartial to hear and determine according to law all issues in just this case”.

6    The interlocutory application first came before me for case management hearing on 4 March 2026. At that time I raised with the parties whether the Court had power to grant the relief sought by Mr Waterhouse in the interlocutory application and drew the parties’ attention to r 2.28 of the Rules. As to the latter the following exchange occurred between the Court, Mr Bailey, counsel for ICAC, and Mr Waterhouse:

Markovic J:    Well, I’ve raised that because I draw your attention to rule 2.28 of the rules, which permits the court to remove a document which has been accepted for filing from the court file. I raise that because the court can do that of its own motion or on application by a party. And if I do consider that that should be – if I think that should be considered, I would invite the parties to provide me with some short submissions about that point.

Mr Bailey:    That may be an appropriate course in the circumstances where it is – grappling with what your Honour says, that may be an appropriate course and the reasons for and against that – not on the interlocutory application but said succinctly, the reasons for that proposition and against that proposition could be put by applicant and respondent on each side and the matter listed for a short hearing in the near future.

Markovic J:    On that issue?

Mr Bailey:    Yes. As – well, as …

Mr Waterhouse:    It won’t be a short hearing.

Mr Bailey:    As a separate topic or a separate question.

7    After further discussion I indicated to the parties that I would invite submissions on whether the power under r 2.28 of the Rules should be exercised by the Court in relation to the interlocutory application and to hear argument on that question. After a further exchange with Mr Waterhouse I informed the parties that written submissions were to be limited to 10 pages in length. Thereafter I had the following exchange with Mr Waterhouse:

Mr Waterhouse:    Yes, and I think that’s on your …

Markovic J:     court file

Mr Waterhouse:    motion, is it?

Markovic J:    That’s on my motion.

Mr Waterhouse:    Yes. Doesn’t that make you biased, having already made up your mind?

Markovic J:    I haven’t made up my mind. I want to hear from the parties …

Mr Waterhouse:    Well, it’s your suggestion.

Markovic J:    about the question. Well, the court can do that of its own motion.

Mr Waterhouse:    Only if there is an obvious reason to remove it, and I don’t think that exists at this moment.

Markovic J:    Well

Mr Waterhouse:    You seem to have dreamed it up.

Markovic J:    Well, you don’t think it exists. Mr Bailey might have a different view; I don’t know. And I’m entitled to hear from the parties about that, aren’t I?

Mr Waterhouse:    Well, you’re not supposed to help the other side

Markovic J:    I’m not helping the other side.

Mr Waterhouse:    sort through the rule.

Markovic J:    I’ve had a look at

Mr Waterhouse:    They didn’t think of it, but you did. You want to throw the case out because you’re outraged that I would dare come along and suggest that this court may be got at and rigged.

Markovic J:    No, Mr Waterhouse. I simply want to understand whether this application should proceed.

Mr Waterhouse:    At all? You mean, I have no right to ask a court to make a special arrangement.

Markovic J:    Well, maybe you do. But at this stage I want to understand, if you do have a right, where that right and power come from.

8    At the conclusion of the case management hearing I made orders (4 March Orders) including for the parties to file submissions on the question of whether an order should be made pursuant to r 2.28 of the Rules in relation to the interlocutory application and listed the proceeding on 4 May 2026 to hear submissions on that question.

9    On 17 March 2026 the parties were informed that the Chief Justice had determined that consideration of the interlocutory application was to be referred to a hearing before a Full Court of this Court.

10    On 15 April 2026 the interlocutory application was again listed before me for case management hearing. Prior to that case management hearing my Associate circulated proposed orders to the parties in relation to the steps to be taken prior to the hearing of the interlocutory application by the Full Court.

11    At the case management hearing Mr Waterhouse indicated that he was not content with the form of proposed orders. The following exchange occurred:

Mr Waterhouse:    I’m not content at all.

Markovic J:    All right. Well, perhaps you can tell me why.

Mr Waterhouse:    Yes, I’m going to. This is your notice of motion, or this is your motion under – and you have formed a view that rule 2.28 applies.

Markovic J:    Well, no. I haven’t

Mr Waterhouse:    and you will pass the onus on to me to explain why rule 2.28 does not apply. But the onus is on you to give me your reasons why you think r 2.28 applies

Markovic J:    No. No, the issue is

Mr Waterhouse:    And I don’t know what your reasons are. And I’m required to put on submissions without knowing where you are coming from. And I want your reasons for why you think rule 2.28 applies.

Markovic J:    No view has been formed by the court. The court would like to hear from the parties as to whether the interlocutory application which you have filed

Mr Waterhouse:    Yes.

Markovic J:    should be removed from the file, or should not have been accepted for filing and therefore be removed or is otherwise an abuse of process.

Mr Waterhouse:    Well, you must have a reason why you’ve moved that.

Markovic J:    No.

Mr Waterhouse:    And I’m entitled to those reasons.

Markovic J:    No. You will be entitled to those reasons once the matter is argued. You will be entitled to reasons. But the court has

Mr Waterhouse:    You have moved to strike out my application.

Markovic J:    The court has

Mr Waterhouse:    No, you personally have moved

Markovic J:    The court

Mr Waterhouse:    to strike out my application for recusal

Markovic J:    The court

Mr Waterhouse:    which is just plain illegal. You should know that, madam.

Markovic J:    The court wishes to hear from the parties on these issues.

12    At the case management hearing I made orders (15 April Orders) vacating Orders 1 to 3 of the 4 March Orders (which concerned the filing of submissions in relation to the application of r 2.28 of the Rules and the listing on 4 May 2026), for the compilation and filing of the application book and for the filing and service of submissions (limited to 15 pages in length) on the following questions, with ICAC to file and serve its submissions first:

(a)    whether the Interlocutory Application is an abuse of process and, if so, whether the Court should order or direct its removal from the Court file;

(b)    whether the Interlocutory Application, on its face, is a document that should not have been accepted for filing and, if so, whether the Court should order or direct its removal from the Court file;

(c)    whether the Court should direct the Registrar to remove the Interlocutory Application from the Court file on the basis of what is apparent from the Court file;

(d)    if any such order or direction is made, whether there should be any consequential orders; and

(e)    if any such order or direction is not made, the case management orders that should be made for the hearing and determination of the Interlocutory Application.

13    The 15 April Orders also provided for the question of whether the Court should order or direct the removal of the interlocutory application from the Court file, and whether it should make any further directions or orders consequential upon the determination, to be listed for hearing on 22 July 2026 for two hours, with each party to be afforded up to one hour for oral submissions.

Mr Waterhouse’s written submissions

14    Mr Waterhouse’s submissions, which were filed in accordance with the 15 April Orders, are titled “Respondent’s submissions and official complaint of actual bias and improper conduct by judges of the Court to the Chief Justice of the Federal Court, Debra Mortimer”. Those submissions include:

Note: The Chief Justice cannot deal with this complaint as it is a complaint against the Chief Justice herself and another judge of her Court with whom she is alleged to be colluding. This complaint, it is suggested, should be dealt with by a suitably qualified jurist nominated by the Chairman of the International Commission of Jurists.

…

NATURE AND COMPLEXITY OF THE PROCEEDINGS

1.    The Respondent respectfully draws the Court’s attention to Federal Court Rule 1.31, which obliges the Court to have due regard to the complexity and nature of the proceedings and to afford sufficient time and opportunity for complex matters raising special issues to be properly litigated. In those circumstances, the imposition of a one-hour time limit and a fifteen-page submission limit is, with respect, entirely inadequate for proceedings of this complexity and public importance. Moreover, these proceedings raise, among other things, allegations of a conspiracy by judges of this Court to pervert the course of justice — including in connection with this Court’s own motion, made verbally from the bench by Markovic J on 4 March 2026, to summarily strike out the Respondent’s interlocutory application for recusal and ’special arrangements’. A party alleging serious wrongdoing by a judge or judges must provide full particulars and that is what I have done herein.

THE RESPONDENT’S ONUS

2.    The Respondent accepts that he bears a heavy onus in making out these serious allegations. He cannot, however, be prevented from discharging that onus by restrictive and perverse orders that plainly serve the purposes of the alleged conspiracy.

THE ALLEGED SCAM AND CONSPIRACY TO PERVERT THE COURSE OF JUSTICE

3.    The purported ’trial’, listed for 22 July 2026, concerns a motion by Markovic J, purportedly pursuant to Federal Court Rule 2.28, made verbally from the bench on 4 March 2026, to summarily strike out the Respondent’s interlocutory application for the Court to recuse itself on grounds of apprehended bias and for ’special arrangements’ to be made. That motion has been listed without affording the Respondent any opportunity to argue or present evidence in support of his application. The Respondent submits that this course of action constitutes a contrived attempt by the Court to arrive at a predetermined result and amounts to a manifest denial of procedural fairness which also constitutes actual bias against the Respondent. Further, as demonstrated below, it constitutes a conspiracy between the Chief Justice and Markovic J to unlawfully deny the Respondent due process and to pervert the course of justice.

SPECIAL ARRANGEMENTS MUST BE MADE

4.    The conduct described above provides further and compelling evidence that this Court cannot be trusted to act independently and impartially in these proceedings. The Court is tainted by systemic and structural bias — both actual and apprehended. In those circumstances, it is submitted that the Federal Court cannot lawfully deal with this matter at all unless an extraordinary judicial officer is brought in from outside the Court to maintain absolute independence and neutrality. That is: by operation of law and constitutional convention, ’special arrangements’ must be made.

The hearing before the Full Court

15    At the commencement of the hearing on 22 July 2026, in my capacity as presiding judge, I relevantly informed the parties that the Court was proceeding on the basis, which Mr Waterhouse indicated was correct, that Mr Waterhouse sought that each member of the Full Court should recuse her or himself from hearing the application before the Full Court. I also informed the parties that given that the question of whether each of us ought to accede to Mr Waterhouse’s application was intertwined with the questions before the Court for determination (as identified by the 15 April Orders), we would hear submissions on the question of recusal and on those questions at the same time.

16    During the course of the hearing, it became clear that Mr Waterhouse makes his application that I recuse myself on two bases.

17    First, because of the case management hearings leading to the hearing of the questions identified by the Court which Mr Waterhouse described as “Markovic J’s motion” and the alleged conspiracy.

18    Secondly, on the basis that the Court as constituted could not be independent or impartial because it “had an interest in covering the scandal up”. Mr Waterhouse submitted:

You don’t want the public knowing that your hallowed profession, judges, can be corrupted. You don’t want the public thinking less of you. You would naturally be revolted with what I’m trying to do. You would hate what I’m trying to do. If I was one of you, I would hate it too. And you shouldn’t be hearing it.

Legal principles

19    While it is not entirely clear, it seems that the first basis on which Mr Waterhouse makes his application that I recuse myself rests on an allegation of actual bias while the second basis on which Mr Waterhouse makes his application that I recuse myself rests on an allegation of apprehended bias.

Actual bias

20    An allegation of actual bias, expressed in terms of prejudgement, is to be distinctly made and clearly proved: see Minister for Immigration v Jia Legeng [2001] HCA 17; (2001) 205 CLR 507 at [69] (Gleeson CJ and Gummow J). In Jia Gleeson CJ and Gummow J relevantly said at [71]-[72]:

71    … Decision-makers, including judicial decision-makers, sometimes approach their task with a tendency of mind, or predisposition, sometimes one that has been publicly expressed, without being accused or suspected of bias. The question is not whether a decision-maker’s mind is blank; it is whether it is open to persuasion. …

72    … 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. …

21    In Drummond v Canberra Institute of Technology (No 3) [2022] FCAFC 169; (2022) 294 FCR 346 a Full Court of this Court (Rangiah, Charlesworth and Banks-Smith JJ) considered the principles relating to actual bias by reference to an earlier decision of this Court stating at [46]-[47]:

46    As to actual bias, in Sun v Minister for Immigration and Ethnic Affairs (1997) 81 FCR 71, North J held at 134:

Actual bias exists where the decision-maker has prejudged the case against the applicant, or acted with such partisanship or hostility as to show that the decision-maker had a mind made up against the applicant and was not open to persuasion in favour of the applicant.

(Citations omitted.)

47    His Honour continued at 135:

…    [P]roof of actual bias by inference from the facts and circumstances of the case will usually involve an assessment of a series of actions by the decision-maker which, when taken together, form a whole picture leading to the conclusion of pre-judgment. It is unlikely that one single action, as distinct from a pattern of conduct, will demonstrate actual bias.

…    [A]ctual bias does not necessarily involve deliberate, knowing, or wilful prejudice against an applicant … A decision-maker may not be open to persuasion and, at the same time, not recognise that limitation.

22    An inquiry about actual bias in the form of prejudgment requires assessment of the state of mind of the judge in question which, for the most part, would have to be undertaken on the basis of what the judge had said and done: see Michael Wilson & Partners Limited v Nicholls [2011] HCA 48; (2011) 244 CLR 427 at [33] (Gummow ACJ, Hayne, Heydon, Crennan and Bell JJ).

Apprehended bias

23    In QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2023) 279 CLR 148; [2023] HCA 15 Kiefel CJ and Gageler J (as his Honour then was) at [37] set out the criterion for determination of an apprehension of bias on the part of a judge, by reference to Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337, namely whether “a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide”. Their Honours observed that the “double might” test emphasised that the criterion is concerned with “possibility (real and remote), not probability”, referring to Ebner at [7] (Gleeson CJ, McHugh, Gummow and Hayne JJ).

24    The test in Ebner has two steps: first, identification of what it is said might lead a judge to decide a case other than on its legal and factual merits; and secondly, an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits: QYFM at [67] (Gordon J). In QYFM Gordon J went on to observe (at [69]) that “in determining whether an apprehension of bias arises, relevant considerations include ’the legal, statutory and factual contexts in which the decision is made’ and ’the nature of the decision …, what is involved in making the decision and the identity of the decision-maker’”, quoting from Isbester v Knox City Council [2015] HCA 20; (2015) 255 CLR 135 at [20] (Kiefel, Bell, Keane and Nettle JJ).

25    In undertaking the assessment from the perspective of a fair-minded lay observer, it is the court’s view of the public’s view, and not the court’s own view, which is determinative: QYFM at [45] (Kiefel CJ and Gageler J). In QYFM Kiefel CJ and Gageler J relevantly described the attributes of a “fair-minded lay observer” at [47]-[48]:

47    Being “fair-minded”, the observer “is neither complacent nor unduly sensitive or suspicious”. Yet the observer is cognisant of “human frailty” and is all too aware of the reality that the judge is human. The observer understands that “information [as well as attitudes] consciously and conscientiously discarded might still sometimes have a subconscious effect on even the most professional of decision-making”.

48    Being “lay”, the observer “is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge”. Though the observer may be taken to understand that the judge, by reason of professional training and experience and fidelity to the judicial oath or affirmation, will have a greater capacity than most to discard “the irrelevant, the immaterial and the prejudicial” and to discharge the judicial function uninfluenced by past professional relationships, “the public perception of the judiciary is not advanced by attributing to the … observer a knowledge of the law and an awareness of the judicial process that ordinary experience suggests not to be the case”. …

(Footnotes omitted.)

26    In Charisteas v Charisteas [2021] HCA 29; (2021) 273 CLR 289 the High Court (Kiefel CJ, Gageler, Keane, Gordon and Gleeson JJ) observed at [12] that “the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice”. In Ogawa (formerly Ms PD) v President of the Australian Human Rights Commission (Leave to Appeal) [2022] FCAFC 161 a Full Court of this Court (Rares, Perry and Hespe JJ) relevantly said at [31]:

The reasonableness of any apprehension must be considered in the context of ordinary judicial practice, including the exigencies of modern litigation such as active case management and intervention by the judge in the conduct of cases by, among other means, the expression of tentative views in exchanges with counsel or the parties. While those views “reflect a certain tendency of mind, [they] are not on that account alone to be taken to indicate prejudgment”: Johnson 201 CLR at 493 [13].

Consideration

27    I consider each of the bases upon which Mr Waterhouse makes his recusal application in turn.

Conduct of case management hearings and the alleged conspiracy

28    Mr Waterhouse contends that I should recuse myself from determining the questions for hearing before the Court on 22 July 2026 because of my conduct during prior case management hearings and in particular, because I raised the question of whether the power under r 2.28 of the Rules should be exercised in relation to the interlocutory application. That same conduct is also said to constitute an alleged conspiracy between the Chief Justice and myself to unlawfully deny Mr Waterhouse “due process” and pervert the course of justice.

29    As set out above, an allegation of actual bias must be clearly made and proved. To the extent that Mr Waterhouse alleges a conspiracy between the Chief Justice and myself as constituting or evidencing prejudgment or partiality such that it is to be interpreted as actual bias, there is no evidence supporting that allegation. Further, there is no evidence of the Chief Justice’s intent in referring the interlocutory application (and the questions related to it) to a Full Court. In doing so the Chief Justice gave a direction pursuant to s 20(1A) of the Federal Court of Australia Act 1976 (Cth) (FCA Act). That section empowers the Chief Justice to give a direction that the original jurisdiction of the Court be exercised by a Full Court in relation to a matter or part of a matter where the Chief Justice considers that the matter (or part of it) is of sufficient importance to justify the giving of such a direction.

30    Nor is there any evidence that I have prejudged the case. It appears that Mr Waterhouse relies on an inference to be drawn from the fact that I raised the question of the applicability of r 2.28 of the Rules to the interlocutory application. I directed the parties to provide submissions on that question and, after the matter was referred to a Full Court for hearing, I made further case management orders for the parties’ submissions to address particular aspects of the operation of r 2.28 of the Rules and for the conduct of the hearing before the Full Court on 22 July 2026. Mr Waterhouse refers to the questions to be determined about r 2.28 of the Rules as my “motion” and my “idea”.

31    It is true that I raised the question of the applicability of r 2.28 of the Rules with the parties and determined that it should be resolved. Rule 2.28 of the Rules entitles the Court to order, on its own initiative, that a document that has been accepted for filing be removed from the Court file. The Rules permit the exercise of that power and, as is apparent from the exchanges reproduced above, I invited submissions from both parties on the application of the Rule. Further, s 37M of the FCA Act, which concerns the overarching purpose of the civil practice and procedure provisions, provides that those provisions are to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. It is incumbent on judges of the Court to case manage matters in their respective dockets in accordance with that purpose. In doing so resort can be had to the powers in the Rules and the FCA Act, subject of course, to giving parties the right to be heard before doing so, as was proposed and occurred here. When the case management hearings and the orders made by me are considered in that context, including with regard to my conduct, no inference of prejudgment is available.

32    For completeness I will also consider the question of apprehended bias. In that regard, the matters that Mr Waterhouse contends might lead me to decide the questions for determination other than on their legal and factual merits are set out at [28] above. They concern questions arising from case management decisions in relation to the interlocutory application, including the direction from the Chief Justice that the interlocutory application be referred to a Full Court.

33    There must be a logical connection between those matters and the feared departure from deciding the case on its merits. This is to be considered from the perspective of the fair-minded lay observer who, as set out above, is neither unduly sensitive nor suspicious and does not have a detailed understanding of the law. The questions for determination by the Full Court are set out at [12] above. They provide an outline of the matters on which the Full Court seeks assistance. The parties were given the opportunity to file submissions in relation to those questions (which they did) and the proceeding was listed for the purpose of the Full Court hearing oral submissions in relation to the questions identified. There is no logical connection between the case management of the interlocutory application, including that I raised the effect and applicability of r 2.28 of the Rules with the parties and proposed it as a first step in determining the interlocutory application, and a fear that I will decide the questions other than in accordance with law and on their merits. Mr Waterhouse fails to explain how the mere raising of a rule and the decision to hear from the parties in relation to its application could be perceived as leading a judge to resolve an issue other than on its merits.

As a member of the Full Court

34    The second basis on which Mr Waterhouse contends that I should recuse myself is because, as a member of the Full Court, I could not bring an impartial mind to determination of the interlocutory application. That is because I would be so concerned by what had transpired in the past and by what Mr Waterhouse was trying to do in identifying alleged corruption in the judiciary that I would wish to “cover it up”.

35    This is a generalised assertion of apprehended bias. Mr Waterhouse does not point to any evidence in support of the assertion or articulate the logical connection between the generalised assertion and my ability to determine the interlocutory application and the questions raised in the 15 April Orders other than in accordance with law and on their merits. That is not sufficient to support a claim for apprehended bias.

36    Judges consider individuals’ conduct and assess that conduct against claims made by litigants on a regular basis. That Mr Waterhouse’s claims may concern alleged conduct of judges (in other jurisdictions) does not establish a logical connection with my ability to determine the matters before me according to law. Mr Waterhouse fails to identify any reason why a fair-minded lay observer would conclude that a judge of this Court would depart from his or her judicial oath or ordinary judicial practice merely because a general allegation concerning the conduct of judges has been raised. He does not, for example, name particular judges and allege a personal relationship. His allegations are generally put and concern alleged corruption across the government and judiciary and an alleged desire on my part to “cover up” the scandal that his notice of grounds of opposition to the creditor’s petition will reveal.

37    I would add two further observations. First, Mr Waterhouse does not explain with precision what the alleged scandal is and how I would cover up such a scandal. Secondly, and critically, the creditor’s petition and Mr Waterhouse’s notice of opposition are not before the Full Court. The only aspect of the matter referred to the Full Court is the interlocutory application. The creditor’s petition and the notice of opposition remain to be considered by another judge of the Court. It is at that time that the allegations made by Mr Waterhouse will be considered.

Conclusion

38    For those reasons, I refuse Mr Waterhouse’s application that I recuse myself.

Associate:

Dated:    28 August 2026

REASONS FOR JUDGMENT

COLVIN J:

39    The Independent Commission Against Corruption in New South Wales (ICAC) has brought a creditor’s petition seeking the sequestration of the estate of Mr Martin Waterhouse. Mr Waterhouse has filed an interlocutory application seeking orders for all judges of this Court to be recused ’for apprehended bias’ and for so-called ’special arrangements’ to be made as to the hearing of the creditor’s petition. Orders were made by the Court of its own motion for a hearing to be convened at which the question whether the interlocutory application should be removed from the Court file was to be considered. A Full Court was convened to conduct the hearing.

40    Mr Waterhouse maintained that all members of the Full Court must recuse themselves for apprehended bias. In effect, he sought to advance the basis for his interlocutory application as the reason why the members of the Full Court could not consider whether the interlocutory application should be removed from the Court file. That is to say, he maintained that all members of this Court should recuse themselves. He also raised separate claims of actual and apprehended bias in respect of the presiding judge, Markovic J. Those separate claims were based upon events that had occurred in the course of the case management of the conduct of the interlocutory application by Markovic J.

41    Where a claim of actual or apprehended bias is made concerning one judge of a multi-member court, it is first a matter for that judge to consider whether to recuse themselves: QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; (2023) 279 CLR 148 at [66], [102]-[103] (Gordon J), [108]-[109] (Edelman J), [193] (Steward J) and [314] (Jagot J). In QYFM, Gordon, Edelman and Steward JJ were of the view that where the judge concerned declines to recuse themselves then it is for all members of the Court to consider the issue. Each of the other judges must then consider whether they will be able to discharge their judicial oath as a member of the court as constituted and the Court as a whole must be satisfied that it has jurisdiction. A multi-judge court will not have jurisdiction if one of its number should recuse themselves but fails to do so. Where there is real doubt as to these matters it is prudent for the court to reconstitute. Jagot J was of the view that the approach to recusal could not be in the hands of the judge’s judicial colleagues where they were exercising co-ordinate jurisdiction: at [315]. Kiefel CJ and Gageler J were of the view that the question of recusal should be addressed by the multi-member court as a coram and not by an individual judge (on the basis that the issue was institutional). They characterised the question as one of jurisdictional fact which the multi-member court can and must determine for itself as a coram: at [27]-[35].

42    As to the bias allegations raised by Mr Waterhouse concerning the presiding judge, they have been considered by her Honour and I have been provided with a draft of her Honour’s reasons. Having considered those reasons, respectfully it is my view that they address the concerns raised by Mr Waterhouse and demonstrate the absence of bias or any apprehension of bias. Consequently, I have no concern that those matters may affect my ability to discharge my judicial oath as a member of the Court and I am satisfied that the continuation of the presiding judge as a member of the Court does not give rise to any jurisdictional issue.

43    Having regard to the way in which Mr Waterhouse presented his contentions to the Full Court, the basis for his claim that there is an apprehension of bias on the part of all members of the Full Court as constituted is also the basis upon which he says the interlocutory application should not be removed from the Court file. Further, Mr Waterhouse made no attempt to differentiate between judges of this Court.

44    The principles to be applied in determining whether there is an apprehension of bias of a kind that goes to jurisdiction have been set out in the reasons of the presiding judge in terms with which I respectfully agree. Mr Waterhouse failed to articulate with the required degree of particularity any recognisable foundation for an issue as to whether there was an apprehension of bias of a kind that applied to all members of the court and, therefore, to the three members of the Full Court. He made no submission particular to my own circumstances.

45    Despite the strident terms in which Mr Waterhouse expressed his submission that there was actual or apprehended bias on the part of every judge of this Court, the contention was without any coherent foundation. Broadly speaking, the logic of the argument appeared to be as follows. Mr Waterhouse claimed to have evidence of a corrupt cover-up that occurred many decades ago. Some years after the alleged events, he a made series of complaints to ICAC in which he advanced the evidence that he says supports the cover-up. Each time, ICAC determined not to investigate his complaint. In 2013, Mr Waterhouse brought proceedings in the Supreme Court in which he sought relief requiring ICAC to conduct an investigation. He failed at first instance and on appeal. The High Court refused his application for special leave. It may be that there is some other type of relief that Mr Waterhouse failed in obtaining in the High Court. It is not entirely clear. In allegations made by Mr Waterhouse in various proceedings he says that he has named various people, including current High Court justices, who would be known to every judge of this Court. The coverup alleged by Mr Waterhouse has now ’snowballed’ through the whole legal system.

46    The submissions advanced were grandiose but lacked any real coherence or details founded in the evidence filed. The submissions failed to demonstrate any rational foundation for the claims about the judges that dealt with his proceedings against ICAC. Still less was there any coherent articulation as to how every judge of this Court lacked the independence necessary to be able to independently adjudicate the creditor’s petition brought by ICAC against Mr Waterhouse. At the very least, many of those judges have been appointed since those judges who were judges of this Court were appointed to the High Court. A number hold commissions on the basis they reside in places other than New South Wales. I am one such judge. There is no evidence about the connections of judges of this Court with any aspect of the issues that will fall for determination on the creditor’s petition. In those circumstances, there was no foundation for the submissions advanced to the effect that every judge of this Court lacked the necessary independence to hear and determine ICAC’s creditor’s petition against Mr Waterhouse. Those submissions should not have been put and certainly should not have been put in the terms in which they were advanced.

47    For those reasons, I am not persuaded that I should recuse myself. Nor am I persuaded that there is some form of jurisdictional issue raised by Mr Waterhouse’s claim as to a reasonable apprehension of bias.

Associate:

Dated:    28 August 2026

REASONS FOR JUDGMENT

MCELWAINE J:

48    Martin Otto Waterhouse seeks an order that I recuse myself from hearing and determining the question of whether his interlocutory application dated 1 December 2025 should be removed from the Court file pursuant to r 2.28 of the Federal Court Rules 2011 (Cth).

49    As best I can discern from the interlocutory application and Mr Waterhouse’s submissions, he contends that I, as a Justice of the Court, am affected by apprehended bias together with each other Justice of the Court. His submissions do not identify the nature of the alleged bias beyond a general assertion of corruption within the judiciary and government. In that respect, I adopt the observations of Markovic J at [35] – [36] of her separate recusal reasons.

50    The allegation against me appears to arise from a direction that the parties provide submissions as to whether r 2.28 of the Rules should be invoked by the Court on its own motion to remove from the Court file the interlocutory application. In substance Mr Waterhouse seeks orders that each Justice recuse himself or herself and that a “special arrangement” be put in place whereby the Governor-General should by Commission appoint “a suitably qualified jurist who is manifestly and undoubtedly beyond political influences and who is unquestionably truly independent and impartial” to determine the Creditor’s Petition filed by the applicant on 30 June 2026. Mr Waterhouse contends that he has:

… compelling evidence that this Court cannot be trusted to act independently and impartially in these proceedings. The Court is tainted by systemic and structural bias — both actual and apprehended. In those circumstances, it is submitted that the Federal Court cannot lawfully deal with this matter at all unless an extraordinary judicial officer is brought in from outside the Court to maintain absolute independence and neutrality. That is: by operation of law and constitutional convention, ‘special arrangements’ must be made.

51    There is a lot more that Mr Waterhouse asserts as foundational to his submission that the interlocutory application should be “litigated and argued in open court” to permit the public to scrutinise the ventilation of his corruption allegations. He further submits that the Court’s consideration of whether r 2.28 of the Rules applies is motivated by a desire to “cover up” a matter “that would embarrass the entire judiciary”. As further developed in oral submissions, the Court suffers from the following “systemic problem”, which constitutes an “attack on the very pillars of society”:

If corruption has entered the legal system by politicians appointing their friends and cronies to the judiciary and every other key position within it, and are using that patronage to influence the outcome of court cases, both civil and criminal, and also the outcome of police investigations and public inquiries.

52    As a member of the judiciary, I understand those allegations to be directed at me and to form the basis of the alleged apprehended bias.

53    How these contentions are said to give rise to apprehended bias on my part is incomprehensible. There is no rational evidence in the plethora of material Mr Waterhouse relies on to support any of his scandalous conspiratorial assertions advanced in his various affidavits, written and oral submissions.

54    The recusal application fails at the first step. There is no basis for the serious allegations of misconduct made against every Justice of this Court and thus the application fails to identify a matter which is contended might lead me to resolve the interlocutory application other than on its legal and factual merit: QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; (2023) 279 CLR 148 at [38], Kiefel CJ and Gageler J.

55    Further, as explained by Barker J in Zaghloul v Woodside Energy Ltd [2014] FCA 306 at [35], making scandalous allegations against a judge is not a springboard for a recusal application.

56    Accordingly, I refuse the application that I recuse myself.

Associate:

Dated:    28 August 2026