FEDERAL COURT OF AUSTRALIA

Kowalski v Chief Executive Officer of Medicare Australia [2010] FCA 411

THE COURT ORDERS THAT:

1.                  Leave to appeal from the ruling of Lander J, refusing to entertain an application for costs, on 16 March 2010 following his decision to recuse himself from hearing the proceeding be refused.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
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REASONS FOR JUDGMENT

1                     The applicant in this proceeding unsuccessfully sought an extension of time within which to seek review by the Administrative Appeals Tribunal (the Tribunal) from a purported decision of the Chief Executive Officer of Medicare Australia (the CEO) arising from a communication which the applicant received from the CEO on 30 July 2009.  The Tribunal on 16 December 2009 refused that application.  The applicant has appealed to the Court from that decision under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth).

2                     Before the matter came to be heard, the applicant applied to Lander J, who was the docket judge, that he should recuse himself from hearing the appeal by reason of findings Lander J had made when sitting as a Deputy President of the Tribunal in a decision given on 21 January 2009: Kowalski v Military Rehabilitation and Compensation Commission [2009] AATA 38.  On 16 March 2009, Lander J decided that he should recuse himself from hearing and determining the appeal because of findings made in that earlier matter.

3                     The applicant then applied for costs of the recusal application.  Lander J declined to make any order for costs, in effect declining to entertain the application for costs, because he had already disqualified himself from hearing the application.  Apart from declining to deal with the costs application because he had recused himself, his Honour gave two further reasons why no order for costs should be made.  The first is simply that the appeal had not been resolved, and apart from him recusing himself, no order has been made in the appeal which would justify making an order for costs against the respondent.  That is self evident.  As his Honour said, a judge recusing himself at the behest of one litigant does not routinely entitle that litigant to an order for costs against the other litigant.  That is particularly so where the other litigant has simply adopted a neutral attitude on the recusal application.  Secondly, Lander J pointed out that the applicant in any event would not be entitled to costs because, as an unrepresented party, he had not incurred any costs, nor had he incurred any expenses by reason of the application.  Lander J said he is not entitled to be compensated for any expenses outside the litigation.  He referred to observations of the High Court (Mason CJ, Brennan, Deane, Dawson and McHugh JJ) in Cachia v Hanes (1993) 179 CLR 403 at 410-411.

4                     This application is for leave to appeal from the “order” made by Lander J refusing to deal with the application for costs on the recusal application.

5                     I shall assume in favour of the applicant that the ruling of Lander J to recuse himself from hearing the appeal, including declining to make an order for costs, was an order of the Court.  At best, a judge’s decision to recuse himself or herself is an interlocutory order in respect of which leave to appeal is required.  His Honour’s declining to entertain and to determine any application for costs of and in relation to the recusal application is equally in the circumstances at best an interlocutory ruling.  There is no doubt that leave to appeal from that ruling is required:  see s 24(1A) of the Federal Court of Australia Act 1976 (Cth).  It is clearly interlocutory because it did not finally determine the rights of any party.  The fact that Lander J declined to make a ruling on the application for costs of the recusal application because his Honour had decided that he should not entertain the application at all on the ground of ostensible bias did not finally determine whether the applicant was entitled to any costs of that application.  That is a matter which can be dealt with by the judge who ultimately hears and determines the appeal.  Apart from having his application acceded to, the applicant is in no worse or no better position on the question of costs, to the extent that any recoverable costs were incurred on the recusal application, than he would have been before that application. 

6                     As the appeal has been referred to me for hearing and determination, I propose to confine the ruling on the application for leave to appeal to limited grounds.  I can resolve it on those grounds.

7                     In my view, leave to appeal from that ruling, assuming it is appealable at all, should be refused.  That is simply because there has been no ruling on the question of whether or not the applicant is entitled to costs of that part of the application.  In my view, Lander J correctly determined that, having decided that there would be an apprehension of ostensible bias because of what had been said by the Tribunal in the matter he referred to, that is that a fair-minded lay observer might reasonably apprehend that he might not bring an impartial and unprejudiced mind to the proceeding (see Johnson v Johnson (2000) 201 CLR 488 at 492, it was appropriate to decline himself to entertain the application for costs of the recusal application.  Having determined that a fair-minded lay observer might reasonably have that view in relation to him hearing and determining the appeal, that apprehension would extend to him hearing and determining any application in the matter.  The applicant cannot approbate and reprobate.  Having successfully applied to the judge to recuse himself on the ground of ostensible bias, he cannot be permitted immediately to say that the judge should then deal with a part of the matter involving an outcome which would operate as an order between the parties.  If the costs were refused, the applicant would say that was because the judge was ostensibly biased.  In addition, no substantial injustice could occur if leave to appeal were refused because the applicant could renew his application for costs in respect of the recusal application when the appeal itself is heard and determined.  Moreover, in the public interest, and in the interest of litigants, the break-up of litigation into a series of interlocutory appeal skirmishes should be avoided where the issue can be resolved at the final hearing.

8                     In those circumstances, it is not necessary for me to address the particular further reasons given by Lander J as to why, had he exercised the discretion to consider the question of costs, he would have exercised that discretion adversely to the applicant.

9                     The application for leave to appeal is refused.  That outcome is not a matter of the applicant being treated differently from any other litigant (as he said in argument would be the case).  The contrary is the case.  He is not deprived from seeking an order for costs of the recusal application although, as Lander J pointed out, there are matters which he would be required to address if he were to maintain such an application as against the respondent.  However, those matters are for the discretion of the judge hearing the appeal if, then, the applicant renews his application for costs.

Associate:

Dated:         30 April 2010