Federal Court of Australia

Victorian Legal Services Board v Kuksal, in the matter of Kuksal [2025] FCA 508

ORDERS

THE COURT ORDERS THAT:

1.    The proceeding be transferred to the docket of another judge of the Federal Court of Australia as soon as is reasonably practicable.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BENNETT J:

INTRODUCTION

1    The Respondents in this proceeding resist an application for sequestration orders sought by the Applicants. The matter was originally allocated to a Judicial Registrar. The Respondents applied to have the matter referred to a judge, and that referral was made on or about 8 May 2025. The matter was duly allocated to my docket on 9 May 2025. I listed the matter for hearing the following Thursday 15 May 2025.

2    On 12 May 2025 following the allocation to my docket, Mr Jared Heath, solicitor for the Applicants sent an email to all parties and my associate stating:

I previously instructed Her Honour as Counsel in a number of matters unrelated to the present proceeding and any of the parties to it. Her Honour has also been previously briefed on behalf of my client, the Victorian Legal Services Board and Commissioner, albeit in matters again unrelated to the present proceeding.

3    Following that disclosure, an application was made that I recuse myself, including because:

It is self-evident that the nature of the allegations made against the Applicants and Mr Heath will require Justice Bennett to evaluate the character of the individuals. This assessment will inevitably be coloured by her past extensive and cordial interactions with them as her effective employer.

4    The submissions filed on behalf of the Respondents also appear to suggest that an apprehension of bias might arise because of what they perceive to be attempts by the Applicant to influence other Court staff both in the Federal Court and the Supreme Court of Victoria.

5    In the course of a hearing on 15 May 2025, further, separate issues were ventilated which were also relied upon by the Respondents as matters that ought to lead to my recusal. In particular, a proposal to make an application to call a person for whom I had previously acted for while a barrister. I was informed that there would be an application to call that former client in either the proceeding proper, or as part of a proposed associated proceeding.

6    The Applicants took no position in relation to the application, but provided assistance to the Court in the identification of the relevant principles and the manner in which issues could arise in the proceeding.

7    For the reasons that I have set out below, I have decided it is not appropriate for me to hear the matter.

The applicable rule and principle

8    The rule as to apprehended bias is well known (see Charisteas v Charisteas [2021] HCA 29; 273 CLR 289 (Kiefel CJ, Gageler, Keane, Gordon, Gleeson JJ) at 296-297 [11]). A plurality of the High Court summarised the principles in Ebner v Official Trustee in Bankruptcy [2000] HCA 63; 205 CLR 337 (Ebner) at 344-345 [6]-[8] (Gleeson CJ, McHugh, Gummow and Hayne JJ) as follows (citations omitted; emphasis in original):

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.

9    The High Court emphasised in QFYM v Minister for Immigration, Citizenship Migrant Services and Multicultural Affairs [2023] HCA 15; 279 CLR 148 (QFYM)) at [38] (Kiefel CJ and Gageler J) that the criterion arising from Ebner logically entails:

(1) identification of the factor which it is said might lead a judge to resolve the question other than on its legal and factual merits; (2) articulation of the logical connection between that factor and the apprehended deviation from deciding that question on its merits; and (3) assessment of the reasonableness of that apprehension from the perspective of a fair-minded lay observer.

10    The Respondents refer to the case of QFYM. They refer to various passages of that judgment including where the High Court observed at [49] that:

Nor is the observer so abstracted and dispassionate as to be insensitive to the impression that the circumstances in issue might reasonably create in the mind of the actual party who is asserting an apprehension of bias. The observer can be taken to appreciate that a party – especially an individual, and especially a non-citizen facing deportation on the basis of his conviction – might understandably experience a justifiable sense of disquiet in seeing his former prosecutor turn up as one of his judges.

11    It is important to bear in mind the duty of judges to hear matters allocated to them. This was expressed by Gleeson CJ, McHugh, Gummow and Hayne JJ in Ebner at [19]:

Judges have a duty to exercise their judicial functions when their jurisdiction is regularly invoked and they are assigned to cases in accordance with the practice which prevails in the court to which they belong. They do not select the cases they will hear, and they are not at liberty to decline to hear cases without good cause. Judges do not choose their cases; and litigants do not choose their judges. If one party to a case objects to a particular judge sitting, or continuing to sit, then that objection should not prevail unless it is based upon a substantial ground for contending that the judge is disqualified from hearing and deciding the case.

12    A number of cases have considered whether an apprehension of bias arises from the association between a judge and the legal representative of a party. In Aussie Airlines Pty Ltd v Australian Airlines Pty Ltd & Qantas Airlines (1996) 65 FCR 215 (Aussie Airlines) an allegation was made that a reasonable apprehension of bias arose because of Merkel J’s association with senior counsel for the first and second respondents (Mr Goldberg QC, as his Honour then was). Justice Merkel and Mr Goldberg QC had a long standing personal, professional and financial association. In that case, Merkel J described the knowledge of the reasonable minded lay observer as follows (at 230):

In seeking to approach the matter on the basis of the principles established in the cases I have referred to, the “informed” observer, when examining the association in the present case, can be assumed to do so with the presumed general knowledge that:

(a)    when barristers act on a client's behalf they do so in a professional capacity as their client's legal advocate selected to act in the case for that purpose. Any barrister so selected could have been briefed to fulfil the same task for the opposite side;

(b)    in accepting a brief to act for a client in a particular commercial case, the barrister does not become part of or identified with the client and has no direct or indirect financial interest in the outcome of the case;

(c)    the barrister acts as such as a member of an independent bar. The barrister is instructed by a solicitor or a firm of solicitors to present the client's case and in doing so is bound by a professional code of ethics ensuring that the barrister's conduct is in accordance with his or her professional standards;

(d)    it is common place for barristers who are close associates, or friends and who may even be from the same set of chambers, to fight on opposite sides of a case without compromising their professional duties to act in the interests of their clients;

(e)    as judges are usually appointed from the senior ranks of the profession, particularly the bar, it is likely that they will be well acquainted, and have formed close associations, with senior counsel appearing before them. It is also likely that they will have personal and professional associations with many of the counsel appearing before them.

13    Justice Merkel also observed (at 224):

In particular they [the authorities] appear to accept that the reasonable bystander would expect that members of the judiciary will have had extensive professional associations with clients but that something more than the mere fact of association is required before concluding that the adjudicator might be influenced in his or her resolution of the particular case by reason of the association. Although the test is one of appearance, it is an appearance that requires a cogent and rational link between the association and its capacity to influence the decision to be made in the particular case. In the absence of such a link it is difficult to see how the test for disqualification as stated in Livesey can be satisfied.

14    The recusal application was refused. In doing so his Honour noted that a friendship between a party and the judge could form a cogent and rational basis for an apprehension of bias, but such a relationship between counsel and the judge would not, because “the observer must be taken to have understood the professional role of counsel” (at 231).

15    That said, not every instance of a professional relationship between a judge and a former client appearing as a party before them will form the basis for a reasonable apprehension of bias. In British American Tobacco Australia Ltd v Peter Gordon and Anor [2007] NSWSC 109, Brereton J canvassed a number of the relevant authorities at [62]-[85], including the case of Re Polites; Ex parte The Hoyts Corporation Pty Ltd (1991) 173 CLR 78. Justice Brereton observed at [85]:

The key to these cases lies in the knowledge and understanding to be attributed to the lay observer. Once it is recognised that authority attributes the observer with some knowledge of the way in which solicitors and barristers and judges work [S&M; R v Judge Russell; Western Australia v Watson; Aussie Airlines; Gascor], the cases establish the following propositions:

•    A prior professional relationship between a lawyer and client — even a long and proximate one — does not generally justify a reasonable apprehension that the lawyer, on becoming a judge, will not determine proceedings to which the former client is a party impartially on their legal and factual merits, because the relevant fair-minded observer understands that counsel is not beholden to the client after the relationship is severed [Polites; Aussie Airlines; S&M].

16    However, where a solicitor or other person who has an association with the judge may be required to give contentious evidence, there are other considerations (Temwell Pty Ltd v DKGR Holdings Pty Ltd [2003] FCA 345 (Temwell) at [8]). In Temwell, Merkel J considered whether he should hear a matter where the witness was a solicitor whose credit would be in issue. The solicitor was, with Merkel J, a co-executor of the estate of his Honour’s mother. The solicitor in that case had not made an affidavit, but it was accepted that was a possibility. Like in this case, in Temwell issues of fact – including allegations of impropriety – were “hotly contested” (see [8]). In that case, Merkel J accepted that he ought not hear the matter. Similarly, in Khoury v Sidhu [2010] FCA 556, Logan J considered that recusal was appropriate where the credit of a potential witness with whom he had a close personal relationship may have been at issue.

17    It is in this context that I consider the issue before me.

analysis

18    The primary issue initially agitated by the Respondents was my former professional and personal relationships with (a) Mr Heath, the solicitor for the Victorian Legal Services Board (the Board), (b) Ms McLeay, the Victorian Legal Services Commissioner, and (c) the Board. The nature of these relationship is that I was instructed by Mr Heath on a number of occasions, and represented the Board, during my time as a barrister. Ms McLeay is the CEO of the Board and the Legal Services Commissioner. I have a friendly relationship with both following many years of professional associations. I am conscious that the Respondents are self-represented, and encountered some difficulty in expressing their submissions. I have sought to make allowances for those difficulties.

19    The authorities above make clear that the reasonable minded lay observer understands that judges are drawn from the senior ranks of the profession and that they will have extensive professional associations connected with that fact. In this respect the fact that I was, as a barrister, instructed by Mr Heath, is not sufficient to give rise to an apprehension of bias. Nor is it a sound basis for recusal that I have previously acted for the Board. Once again, the reasonable minded lay observer would expect a senior barrister, acting in accordance with the “Cab Rank” principle, to have acted for a range of parties, and to have accepted briefs from a range of solicitors, without compromising their independence. A lay observer would not reasonably apprehend that the judge could not determine proceedings involving the former client, or instructor, impartially.

20    In the course of argument, the prospect of an application to call as a witness a person for whom I had previously acted was raised (the Former Client). The Former Client is not a person that the Respondents could call as of right. There is therefore some question as to whether they could legitimately subpoena or call evidence from the Former Client. So far as I understand the argument it is put on two bases:

(1)    First: that there is in contemplation a contempt application to be made in the present proceeding. The Former Client would be a person from whom evidence would be or could be adduced;

(2)    Second: that the Former Client could be called to seek to establish that there is a proper basis to not accept the Creditor’s Petition under s 52(2) of the Bankruptcy Act 1966 (Cth).

21    It may be that the attempts to call the Former Client are misconceived. However, the circumstances are unusual: my professional obligations from the time that I acted for the Former Client prevent me from disclosing all of the matters that are relevant to assessing whether or not it is appropriate for me to adjudicate on matters which concern them in the specific circumstances of this case.

22    It is well established that the circumstances which may give rise to a duty of disclosure are broader than those which may justify disqualification (Aussie Airlines at 220-222 and the cases cited therein). That said, the practice of disclosure itself “is a protection of the manifest integrity of the judicial process” (S & M Motor Repairs Pty Ltd v Caltex Oil (Australia) Pty Ltd (1988) 12 NSWLR 358 at 369 (Kirby P)) and “necessarily assists securing the object that justice is ‘seen’ to have been done” (Aussie Airlines at 221). I consider that my being prevented from disclosing all relevant issues which could be relevant to the issues that I am called upon to consider is a matter which itself could cause a reasonable minded lay observer to be concerned that there might be matters that could interfere with my adjudication of the issues before me. In the particular circumstances of this matter, it is sufficient, in my view, to create a reasonable apprehension which makes it appropriate that I not hear the matter further. It may be that in the context of a different matter a different conclusion could have been appropriate, but that is not an issue that I need to determine.

23    While counsel for the Applicant did not have much time to consider the issue, he agreed that at a philosophical level, the fact that there is a limitation on my disclosure is a matter which could concern a reasonable minded lay observer.

24    I am conscious in so concluding that I must not decline to hear a matter without good cause, and the interests of justice are not served by delay that could be occasioned by my decision. However, the issue has come to my attention within days of the matter being assigned to my docket, and thus I do not consider that any true prejudice is caused.

25    I am fortified in this conclusion by the concerns that have been raised about whether a reasonable lay observer could be concerned as to whether I would bring an open mind to the proposed application to cross examine Mr Heath and Ms McLeay as to their credit in circumstances where I have a longstanding relationship with each of them. I do not consider it necessary that I canvass the matter in any depth. However in the context of the matters that I have already analysed, it is sufficient that I conclude that having regard to all of the circumstances together, it is appropriate that the matter now be referred to the docket of another Judge.

Conclusion

26     My decision that I not continue to hear the matter should not be taken as an adjudication on any of the factual matters that were put to me in the course of the hearing. Given that I have decided that I should not be further involved in the matter, it is not appropriate that I comment further, save to explicitly note that no findings of any kind on any factual matter have been made in the course of considering this issue.

Associate:

Dated:    19 May 2025