Federal Court of Australia

Villawood Management Pty Ltd v Marlton Investments Pty Ltd [2026] FCA 1361

ORDERS

THE COURT NOTES THAT:

A.    Kara Sabo is not a party to the proceeding but is a person against whom relief is sought in respect of criminal contempt in the interlocutory application dated 28 April 2026.

THE COURT ORDERS THAT:

1.    The interlocutory applications dated 7 April and 28 April 2026 be referred to the National Operations Registrar for reallocation to another judge.

2.    By 1 October 2026 the parties are to file submissions of no more than four pages on the appropriate costs orders to be made.

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

ORDERS

THE COURT NOTES THAT:

A.    Kara Sabo is not a party to the proceeding but is a person against whom relief is sought in respect of criminal contempt in the interlocutory application dated 28 April 2026.

THE COURT ORDERS THAT:

1.    The interlocutory applications dated 7 April, 28 April and 9 July 2026 be referred to the National Operations Registrar for reallocation to another judge.

2.    By 1 October 2026 the parties are to file submissions of no more than four pages on the appropriate costs orders to be made.

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

REASONS FOR JUDGMENT

ANDERSON J:

Introduction

1    Villawood Management Pty Ltd has brought Contempt Charges against Mr Anthony Johnson and Ms Kara Sabo in Villawood Management Pty Ltd v Marlton Investments Pty Ltd (VID 640 of 2024) (the Marriott Waters Proceeding) and Villawood Management Pty Ltd v Marlton Group Pty Ltd (VID 653 of 2024) (the Wallan Proceeding).

2    Mr Johnson and Ms Sabo have filed interlocutory applications seeking that I recuse myself and refer the Contempt Applications to the National Operations Registrar for reallocation to another judge (Recusal Applications). This is opposed by Villawood. The central contention of the Recusal Applications is that the Contempt Charges arise out of, and/or significantly rely on, substantially the same substratum of facts that were the subject of an interlocutory judgment I delivered on 21 August 2025 in Villawood Management Pty Ltd v Marlton Group Pty Ltd [2025] FCA 980 (2025 Judgment or J).

3    Mr Johnson and Ms Sabo apply for me to recuse myself from hearing the Contempt Applications on the ground of apprehended bias. Mr Johnson and Ms Sabo contend that the 2025 Judgment gives rise to a reasonable apprehension of bias that I might not be impartial or might be prejudiced against Mr Johnson and/or Ms Sabo in determining the Contempt Applications.

4    Mr Johnson is the third respondent in both proceedings. Ms Sabo is not a party to either proceeding. Ms Sabo is Mr Johnson’s daughter and is an employee of Marlton Group Pty Ltd (the family company, which is the fourth respondent in the Marriott Waters Proceeding and the first respondent in the Wallan Proceeding).

2025 Judgment

5    In the 2025 Judgment I was required to review two decisions by Judicial Registrars of this Court in the Wallan Proceeding to:

(1)    set aside a subpoena issued by Villawood to Mills Oakley (MO Subpoena). Mills Oakley are the solicitors for Mr Johnson and Marlton in the Wallan and Marriott Waters Proceedings (but they are not representing Mr Johnson in respect of the Contempt Charges); and

(2)    dismiss an application by Villawood to examine Mr Johnson as to the adequacy of his compliance with a Notice to Produce (NTP) and an order of the Court that Mr Johnson produce documents referred to in the NTP (Production Order).

6    The MO Subpoena sought documents relating to instructions provided by Mr Johnson to his solicitors about a “Development Management Agreement” (DMA), which was the subject of two solicitor affidavits by Mr Stuart Lewin in the Marriot Waters Proceeding (First Lewin Affidavit and Second Lewin Affidavit): J [46].

7    I was required, in determining the application before me, to decide “whether an improper purpose taints the communications … responsive to the MO Subpoena such that they are not protected by privilege and may be inspected”: J [60(b)]. I noted that in considering the issue, it was not necessary to prove the improper purpose on the balance of probabilities, but instead the prima facie test applied: J [57]–[58].

8    Mr Johnson and Ms Sabo contend that I made a number of findings which are relevant to the Contempt Charges and that those findings were made in unqualified terms.

9    Mr Johnson relies upon the following matters stated by me in the 2025 Judgment:

(1)    “In the absence of an explanation in the second Lewin affidavit as to the circumstances in which the false evidence in the [First Lewin Affidavit] came about as to when the 2012 DMA was executed, I infer that Mr Johnson’s purpose in giving the instructions to Mr Lewin was to create false evidence to assist Mr Johnson’s pleaded defence”: J [87].

(2)    “It is plain on the evidence that those instructions given by Mr Johnson [prior to the First Lewin Affidavit] were false”: J [88].

(3)    “In the absence of an explanation, I infer that Mr Johnson’s false instructions were not an error, or given innocently. This is particularly the case, where the assertion as to when the 2012 DMA was executed was accompanied by an explanation as to why Mr Johnson did not reveal the 2012 DMA for many years, namely, that no payment was due in the foreseeable future”: J [89].

(4)    “I infer that Mr Johnson’s purpose in giving those instructions can only have been to use Mr Lewin to mislead Villawood and the other parties in the Wallan Proceeding and to mislead the Court itself”: J [91].

(5)    “For these reasons, I am satisfied that Mr Johnson gave false instructions to Mr Lewin for an improper purpose in respect of the [First Lewin Affidavit]”: J [92].

(6)    “While the Johnson Parties submit that the supposed purpose in giving false evidence about when the 2012 DMA was executed is not explained or evident, the purpose would appear to be no different to the purpose of the false evidence given in the [First Lewin Affidavit]”: J [96].

(7)    “For the reasons I have outlined above, I have inferred that Mr Johnson’s purpose in giving instructions to Mr Lewin in respect of [the First Lewin Affidavit] was to create false evidence to assist Mr Johnson’s case”: J [98].

(8)    “I accept Villawood’s submission that where Mr Johnson’s instructions were in pursuance of an improper purpose when they were given, they cannot be retrospectively cured of that defect by the fact that the [First Lewin Affidavit] was not read”: J [98].

10    Mr Johnson also relies upon the following findings made by me in the 2025 Judgment:

(1)    “I am satisfied, considering the evidence as a whole, that Villawood has established to the requisite prima facie standard that the 2012 DMA was not executed in about 2022, but instead was created in 2023”: J [96].

(2)    “[T]he evidence identified by Villawood establishes a prima facie case that the [Second Lewin Affidavit] may not have corrected the false evidence in the [First Lewin Affidavit], but rather one false piece of evidence was replaced by another piece of evidence that was either false, or not full and frank”: J [99].

11    Ms Sabo relies upon the following findings I made in the 2025 Judgment:

(1)    the 2012 DMA was created in 2023, notwithstanding it was dated 12 January 2012: J [30] and [96];

(2)    Ms Sabo created the 2012 DMA in 2023: J [95(e)];

(3)    I did not disavow the applicant’s reliance on the assertion that Ms Sabo created the 2012 DMA;

(4)    Mr Johnson acted with an improper purpose in giving false instructions to his solicitors in respect of the First Lewin Affidavit and Villawood established a prima facie case that the Second Lewin Affidavit merely replaced one piece of false evidence with another: J [92] and [99];

(5)    Mr Johnson provided his lawyer, Mr Lewin, with false instructions: J [40], [75], [76], and [81]–[96].

12    In the 2025 Judgment, I was satisfied that Villawood “established, on a prima facie basis, that legal professional privilege does not attach to the documents produced in response to the MO Subpoena”: J [100].

13    However, I rejected the application by Villawood to examine Mr Johnson in relation to the response to the NTP and Production Order: J [112]. I found that Villawood had not established a sufficient basis to examine Mr Johnson, primarily because of the extensive affidavit evidence describing, in detail, the searches undertaken by the responsible employees and officers of the respondents to the Wallan Proceeding. I was therefore satisfied that there was no reason to doubt that the respondents had been properly advised of their legal obligations, and properly assisted, in relation to the NTP: J [108]–[112].

The contempt applications against Mr Johnson

14    The statements of charge for the two contempt applications against Mr Johnson filed by Villawood and dated 7 April 2026 in each of the Marriott Waters Proceeding and the Wallan Proceeding both allege that:

(1)    in July 2024, Mr Johnson knowingly provided false instructions to his legal representatives in relation to the date of execution of the DMA in a deliberate attempt to deceive the Court, with those instructions forming the basis of the First Lewin Affidavit; and

(2)    in or around November 2024, Mr Johnson knowingly provided false instructions to his legal representatives in relation to the date of execution of the DMA in a deliberate attempt to mislead and deceive the Court, with those instructions forming the basis of the Second Lewin Affidavit.

15    The statement of charge for a single contempt against Mr Johnson, filed by Villawood and dated 9 July 2026 in the Wallan Proceeding, alleges that Mr Johnson failed to produce 17 documents to the Court in accordance with a Notice to Produce dated 27 August 2024 and orders made on 14 October 2024 by a Registrar of the Court.

16    Mr Johnson submits that the overlap between the facts Villawood will seek to prove on the Contempt Applications and the findings in the 2025 Judgment would be apparent to the reasonable, hypothetical observer.

The contempt applications against Ms Sabo

17    The statements of charge against Ms Sabo, filed in both the Marriott Waters Proceeding and the Wallan Proceeding, on 28 April 2026, each allege that:

On 22 July 2024, Kara Sabo acted in contempt of court by knowingly providing false instructions to the legal representatives of the Respondents in relation to the date of execution of a written agreement styled “Development Management Agreement” and bearing the date 12 January 2012 (2012 DMA), in a deliberate attempt to deceive the Federal Court in [the Marriott Waters and Wallan Proceedings].

Legal principles

18    The ground of apprehended bias is made out “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”: Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 at [6] (Gleeson CJ, McHugh, Gummow and Hayne JJ) (sometimes described as the “double might” test).

19    The question is one of possibility (real and not remote), not probability: Ebner at [7]. It is an objective test that does not require consideration of the decision-maker’s state of mind: Ebner at [7]–[8] and Michael Wilson and Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48 at [32]–[33] (Gummow ACJ, Hayne, Crennan and Bell JJ).

20    The bias rule is concerned as much to preserve the public appearance of independence and impartiality as it is to preserve actuality; the requisite independence is decisional independence and the requisite impartiality is in the finding of facts, the exercise of procedural directions and the application of the applicable law: CNY17 v Minister for Immigration and Border Protection (2019) 268 CLR 76; [2019] HCA 50 at [18] (Kiefel CJ and Gageler J).

21    The High Court in SunshineLoans Pty Ltd v Australian Securities and Investments Commission (2026) 428 ALR 575; [2026] HCA 8 at [1] (Gageler CJ and Gleeson J) (and see Gordon J at [60], Edelman J at [105], Jagot J at [130] and Beech-Jones J at [173]) stated that the test for apprehended bias requires three steps:

(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”.

22    In applying the test for apprehended bias, the fair-minded lay observer “is taken to be aware of the nature of the decision and the context in which it was made as well as to have knowledge of the circumstances leading to the decision”: Isbester v Knox City Council (2015) 255 CLR 135; [2015] HCA 20 at [23] (Kiefel, Bell, Keane and Nettle JJ). The reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice and having regard to the fact that a judge’s “training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial”: Johnson v Johnson (2000) 201 CLR 488; [2000] HCA 48 at [12]–[13] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ). However, the observer is not assumed to have a detailed knowledge of the law (Johnson v Johnson at [13]); “it is always to be kept in mind that the observer is a layperson and not a lawyer”: GetSwift Ltd v Webb (2021) 283 FCR 328; [2021] FCAFC 26 at [34] (Middleton, McKerracher and Jagot JJ).

23    An application on the basis of pre-judgment does not require a finding that the judge has demonstrated bias. The question is whether the reasonable observer may consider that there is a reasonable apprehension of bias. In Livesey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288, the High Court stated at 300:

It is, however, apparent that, in a case such as the present where it is not suggested that there is any overriding consideration of necessity, special circumstances or consent of the parties, a fair-minded observer might entertain a reasonable apprehension of bias by reason of prejudgment if a judge sits to hear a case at first instance after he has, in a previous case, expressed clear views either about a question of fact which constitutes a live and significant issue in the subsequent case or about the credit of a witness whose evidence is of significance on such a question of fact. The consideration that the relevant question of fact may be conceded or that the relevant person may not be called as a witness if the particular judge sits would not, of course, avoid the appearance of bias. To the contrary, it would underline the need for the judge to refrain from sitting.

24    It is also important to emphasise, as the New South Wales Court of Appeal said in Kwan v Kang [2003] NSWCA 336:

[77] Despite the importance of the appearance of justice being seen to be done, there is a strong need for courts to apply realistic criteria in considering whether a reasonable apprehension of bias has been established. This is particularly so when dealing with a disqualification application based on what is said to be pre-judgment by a judicial officer. This has often been stressed.

[78] Judicial officers are required to discharge their professional duties unless disqualified by law. They should not accede too readily to suggestions of an appearance of bias. Nothing should be done that would encourage parties to seek such disqualification without justification.

25    As Mason J said in Re JRL; Ex parte CJL [1986] HCA 39; (1986) 161 CLR 342 at 352:

It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party.

…

Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour.

26    However, Gordon J said in SunshineLoans at [91], citing Ebner:

[I]t is not “improper for a judge to decline to sit unless the judge has affirmatively concluded that [they are] 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.” But that observation was qualified: “if the mere making of an insubstantial objection were sufficient to lead a judge to decline to hear or decide a case, the system would soon reach a stage where, for practical purposes, individual parties could influence the composition of the bench. That would be intolerable.”

27    So, I am required to consider whether a reasonable, hypothetical observer, with knowledge of the 2025 Judgment and the Contempt Applications, but without detailed knowledge of the law, might form the view that I might not bring an impartial mind to the determination of the Contempt Applications.

Mr Johnson and Ms Sabo’s submissions

28    Both Mr Johnson and Ms Sabo rely upon the decision of the High Court in British American Tobacco Australia Services Ltd v Laurie (2011) 242 CLR 283; [2011] HCA 2. The issue before the Court was explained by the majority (Heydon, Kiefel and Bell JJ) as:

[103] Judge Curtis, who is the fourth respondent to this appeal, is a judge of the Dust Diseases Tribunal of New South Wales (“the Tribunal”). In proceedings which are unrelated to the present appeal, his Honour found that the appellant, British American Tobacco Australia Services Ltd (“BATAS”), developed and adopted a fraudulent business policy. The existence of that policy is in issue in proceedings which are brought against BATAS by the first respondent, Claudia Jean Laurie. Mrs Laurie’s claim has been listed for hearing before Judge Curtis. The question raised by the appeal is whether the apprehension of bias rule disqualifies his Honour from hearing Mrs Laurie’s claim. It has not at any stage been alleged, nor could it have been, that his Honour displayed actual bias.

[104] … The apprehension here raised is of pre-judgment; it is an apprehension that, having determined the existence of the policy in the earlier proceeding, Judge Curtis might not be open to persuasion towards a different conclusion in Mrs Laurie’s proceeding.

29    It is important to first understand that Judge Curtis was required to find (a) whether evidence from BATAS’ former in-house counsel and company secretary, Mr Gulson (his affidavit and also parts of the transcript of his evidence in proceedings in the United States) was subject to client legal privilege, and (b) whether this material could be adduced in evidence under s 125(1) of the Evidence Act 1995 (NSW), which permits evidence to be adduced of a communication that is the subject of client legal privilege if the communication is made “in furtherance of the commission of a fraud”: at [106]. Judge Curtis found:

(1)    “I am persuaded on the present state of the evidence that BATAS in 1985 drafted or adopted the Document Retention Policy for the purpose of a fraud within the meaning of s 125 of the Evidence Act.”; and

(2)    “[i]n the absence of evidence to the contrary, I infer that legal advice to the effect that destruction of documents pursuant to the terms of the policy was not contrary to law, was integral to the decision by BATAS to persist with its policy of selective destruction.”.

30    The majority noted that proof of fraud for the purposes of s 125(1) is facilitated by s 125(2) which provides that a court may find that a document or communication is tainted by fraud if there are reasonable grounds for finding the fraud was committed and a communication was made or a document prepared in furtherance of the commission of the fraud: at [116]. The majority observed, however, that Judge Curtis had not framed his findings as resting upon reasonable grounds within the meaning of s 125(2), but had found fraud under s 125(1) on the footing that such a finding must involve an element of dishonesty and that his findings implicitly involved the application of the principles in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336: at [117].

31    The majority found that Judge Curtis’ finding of fraud was dependent on the evidence of Mr Gulson, including evidence given under cross-examination: at [118]. The existence of the document retention policy was a central issue in the Laurie proceedings, and was denied by BATAS: at [122].

32    The majority held that the primary judge should be prohibited from further hearing or determining the Laurie proceedings. Central to that finding, the majority pointed to the following:

(1)    the judge had not made an “incautious remark or expression of a tentative opinion”, but had made a finding that the relevant party had engaged in fraud: at [140];

(2)    the finding of fraud was expressed “without qualification or doubt”, based on “actual persuasion of the correctness of the conclusion”: at [145];

(3)    the judge had expressed himself “in terms indicating extreme scepticism” about the company’s denials and “strong doubt about the possibility of different materials explaining the difficulties experienced by the judge”: at [145]; and

(4)    the nature of fraud about which the judge had been persuaded was extremely serious: at [145].

33    Ultimately, the majority found at [145] that:

a reasonable observer might possibly apprehend that at the trial the court might not move its mind from the position reached on one set of materials even if different materials were presented at the trial – that is, bring an impartial mind to the issues relating to the fraud finding.

34    Mr Johnson and Ms Sabo also rely upon the decision of the New South Wales Court of Appeal in Kwan where Sheller, Ipp and Tobias JJA held that a finding by the primary judge that he was “satisfied” that documents had been prepared in furtherance of a fraud (for the purposes of a privilege dispute) gave rise to a reasonable apprehension of pre-judgment of like issues at trial. The primary judge had stated he was satisfied about the very allegation of fraud on which the first respondent was still to lead evidence and the appellant was still to rebut. The Court rejected the first respondent’s argument that the primary judge “only intended to decide the issues of admissibility and privilege on the basis of whether ‘reasonable grounds’ existed to draw the inference that a fraud or abuse of power had been committed” and “did not intend to make any final judgment”: at [89]. The Court found that while the primary judge referred to the need to make the decision on the basis of an inference resting on “reasonable grounds” that did not gainsay or “cure the impression” created by his findings expressed in emphatic language of absolute finality. Rather, the reader tends to gain the impression that the findings in absolute terms represent the innermost belief of the judge, whereas the qualified findings are made according to a required formula.

35    Mr Johnson and Ms Sabo submit that the findings I made in the 2025 Judgment were expressed in language which was unequivocal as to:

(a)    the falsity of Mr Johnson’s instructions;

(b)    Mr Johnson’s knowledge of the falsity of those instructions; and

(c)    Mr Johnson’s purpose in giving the instructions,

which they submit are all factual issues that are at the heart of the Contempt Applications.

36    Ms Sabo submits that the findings and comments I made about Mr Johnson’s conduct in the 2025 Judgment are both integral to, and cannot be disentangled from, the charges against her. The charges involving Ms Sabo allege that she knowingly provided false instructions to Mr Johnson’s legal representatives, knowing that those instructions would be relied upon, in a deliberate attempt to deceive the Court. Ms Sabo submits that the findings I made in the 2025 Judgment squarely put not only Mr Johnson’s credibility but also, by implication, Ms Sabo’s credibility, in issue.

37    Mr Johnson and Ms Sabo submit that the language used by me in the 2025 Judgment tends to convey to the hypothetical observer a finality of views notwithstanding that the 2025 Judgment acknowledges that the standard of satisfaction on that interlocutory application was to be at a prima facie level. Mr Johnson and Ms Sabo submit that the impression given to the hypothetical observer, having regard to the 2025 Judgment as a whole, is that “the Court might not move its mind from the position reached on one set of materials even if different materials were presented at the trial” of the Contempt Applications. It is submitted that this case is closely analogous with the cases of Livesey, British American Tobacco and Kwan and it is plain a reasonable apprehension of bias arises.

Villawood’s submissions

38    Villawood submits that observations made by a judge in an earlier judgment will not typically give rise to concerns of apprehended bias if they were necessary for the judge to resolve the matter before the Court: SunshineLoans at [5]. In my view, this submission takes the finding by Gageler CJ and Gleeson J at [5] too far. Their Honours’ comments were directed to the particular application before them: whether a judge, having made particular findings, including adverse credibility findings, during the liability stage of a civil penalty proceeding should be disqualified from hearing the penalty stage on the ground of apprehended bias. Gageler CJ and Gleeson J held at [5]:

There is no logical connection between the identified source of apprehended bias and the postulated deviation from the course of deciding the case on its legal and factual merits. Though expressed in language that is highly critical, the findings to which SunshineLoans points in the liability judgment were all open to be made by the primary judge in the proper discharge of his function of determining the issues of fact and law raised for his determination at the liability stage of the hearing. Having been so made, those findings are all available to be taken into account by the primary judge to the extent they are relevant to such issues as may be raised for determination at the penalty stage of the hearing. In determining penalty, the primary judge is not required to put aside the views he has already expressed concerning the conduct of SunshineLoans. And, in evaluating such further evidence as may be given by Mr Powe at the penalty stage of the hearing, the primary judge is not required to put aside the views he has already expressed concerning the credibility of Mr Powe as a witness.

39    Gordon J decided the appeal ought be dismissed based on the third factor (reasonableness) not being made out. Again, her Honour’s reasoning is specific to the context of a bifurcated penalty hearing. Her Honour said at [71]:

[71] ... The fair-minded lay observer is taken to be aware that this case involved a final hearing in a civil penalty proceeding, which was conducted in two stages in a way common to civil penalty proceedings, involving a first stage determination as to questions of liability, and a second stage determination as to questions of penalty. This can be distinguished from other cases in which this Court has accepted that a reasonable apprehension of bias may arise where a judge has previously made findings on facts in issue or with respect to a witness’s credibility and may be required to adjudge those same matters in a subsequent case.

[72] The fair-minded lay observer is also taken to know that the findings made in the first stage, to the extent relevant in the second stage, would be binding on the judge hearing and determining the second stage regardless of which judge heard the second stage. The observer is taken to know that the second stage would proceed on the foundation of what happened in the first stage.

(Emphasis in the original).

40    In drawing this distinction, I of course accept, as Edelman J said in SunshineLoans at [95] that, “the principles of apprehended bias can operate upon matters that arise during the course of a single trial, whether bifurcated or not, in the same way that those principles can operate upon matters that arose prior to the trial”. The point is that the factual and legal context of the statement or conduct alleged to give rise to the bias is as important as the conduct or the content of the statement made: SunshineLoans at [131] (Jagot J).

41    Villawood submits that in Livesey, the Court said that there is reasonable apprehension of bias where a trial judge expresses clear views about a question of fact which constitutes a live and significant issue in the subsequent case or about the credit of a witness whose evidence is of significance to a question of fact. In contrast, Villawood submits that the matters which are the subject of the First Lewin Affidavit are, in large part, not live as the impugned conduct has been substantially admitted by Mr Johnson.

42    Villawood submits that the cases of British American Tobacco and Kwan are readily distinguishable from the present case. In British American Tobacco the trial judge made findings to the Briginshaw standard which was not the approach adopted by me in the 2025 Judgment. Further, in British American Tobacco the trial judge made findings about the conduct of British American Tobacco in circumstances where there had been
cross-examination. That is not this case.

43    Villawood submits that Kwan is also distinguishable because of the unorthodox procedural history of that case and where, unlike in the present case, the trial judge’s reasons were given in the context of his Honour having inspected the impugned documents. That is not this case.

44    Villawood submits that the case of Bob Jane Corporation Pty Ltd v ACN 149 801 141 Pty Ltd [2015] FCA 1343 at [22] is also distinguishable from the present case where the recusal applications in that case arose from earlier findings by Besanko J in respect of a prior contempt application.

45    Villawood submits that the case of Westpac Banking Corporation v Forum Finance Pty Ltd [2022] FCA 981 (Lee J) is also distinguishable from the present case because in that case there had been cross-examination of a witness as to his credit.

46    Villawood submits that the findings which I made in the 2025 Judgment do not give rise to a reasonable apprehension of bias that I might not be impartial or might be prejudiced against Mr Johnson and/or Ms Sabo in determining the Contempt Applications.

Consideration

47    I accept, as Villawood submits, that in the majority of cases relied upon by Mr Johnson and Ms Sabo, the judge has seen the witness, formed views and then expressed the views which led to the findings of apprehended bias. However, two points must be made. First, as accepted by the parties, allegations of apprehended bias are fact specific and must be determined according to the particular factual and legal context: Johnson v Johnson at [14], Livesey at 299–300, SunshineLoans at [97] (Edelman J) and [131] (Jagot J). Therefore, there is a need to be cautious when seeking to draw analogies from other cases. Secondly, the authorities relied upon do not support, in my view, the existence of a different threshold or principle which applies in considering apprehension of bias in cases where viva voce evidence has been led. In that regard, I refer to Southern Equities Corporation Ltd (in liq) v Bond (2000) 78 SASR 339; [2000] SASC 450, a decision relied upon by Mr Johnson, where the Full Court of the Supreme Court of South Australia held that the primary judge ought to have recused himself from hearing a trial after making findings going to the credit of the appellants in an interlocutory decision in which no viva voce evidence had been given. I also accept Mr Johnson’s submission that there is no requirement that a finding of credit or a lack of credit should turn on whether the judge has formed views about the witness after the witness having given evidence-in-chief or being cross-examined. I found, in the 2025 Judgment, albeit on the prima facie standard, that Mr Johnson gave false evidence and sought to mislead the Court – that necessarily goes to his credit: see Southern Equities at [58] (Olsson J) and [150] (Bleby J).

48    Villawood also sought to distinguish this case from British American Tobacco, on the basis that it involved findings to the Briginshaw standard. I similarly do not find that a persuasive or helpful submission. I am required to consider each of the three steps set out by the High Court.

49    The subject matter that required prima facie determination by me in the 2025 Judgment is the same subject matter which will require determination of the Contempt Charges, namely, the authenticity of the 2012 DMA and the alleged false instructions to Mr Johnson’s lawyers about the 2012 DMA. I accept Mr Johnson and Ms Sabo’s submissions that the findings I made, the pathway of reasoning I adopted, and the evidence I relied on in relation to when the 2012 DMA was created fall squarely within the particulars of the Contempt Charges.

50    I accept Mr Johnson and Ms Sabo’s submissions that the findings which I made in the 2025 Judgment do not express any “qualification or doubt” as to when the 2012 DMA had been created. I accept the submission of senior counsel for Villawood, Mr Noel Hutley SC, that it is not permissible to fasten upon individual statements in a judgment without considering them in the context of the whole judgment. The critical question is how a reasonable observer would, or might, read those unqualified findings and statements in the context of the whole judgment, particularly my repeated statements of the prima facie standard I was applying. Mr Hutley said that the 2025 Judgment is “bookended [] with an assertion of a prima facie case” and therefore, “the fair-minded observer, reading the judgment, would realise that [I] was expressing both at the beginning and at the end that all statements” were made on that basis.

51    However, I accept Mr Johnson and Ms Sabo’s submission that I expressed findings in respect of Mr Johnson’s credibility including that the purpose of providing false instructions can only have been to mislead the parties and the Court: J at [91]. I also accept that that is the very gravamen of the charges against Mr Johnson. The overlap between the 2025 Judgment and the Contempt Applications is highlighted by the reliance on the 2025 Judgment in an affidavit by Villawood’s solicitor, Mr Vince Annetta, sworn on 9 July 2026 in support of the Contempt Applications.

52    The factor which Mr Johnson and Ms Sabo say might lead me to resolve the Contempt Applications other than according to the legal and factual merits is the findings I made in the 2025 Judgment, specifically the findings in relation to Mr Johnson providing, and his purpose in so providing, false instructions. The articulation of the logical connection between that factor and the apprehended deviation from deciding that question on its merits is that those findings, made in a civil proceeding and expressed in unqualified language, cannot be taken into account in the Contempt Applications, which import the criminal standard of proof (unlike the prior findings in the liability hearing in SunshineLoans, which were binding on the judge determining the penalty hearing). Indeed, in SunshineLoans Jagot J said at [148]–[149]:

A case such as the present may be contrasted with the position which arises in other, different but common-place, contexts of a judge who has made an adverse credit finding against a person, for example: (a) in an interlocutory judgment when the same person will be giving evidence at the final hearing; (b) in a final judgment when the same person will be giving evidence in another, unrelated, proceeding before the same judge …

This difference in the operation of the principle of finality enables a potential apprehension of bias to arise from the making of an adverse credit finding in the two examples given. In the two examples given, all issues remain at large in the subsequent hearing.

53    To that end, it is worth emphasising that the Contempt Applications involve criminal charges for which Villawood seeks the imposition of terms of imprisonment. Kirby J said in Antoun v The Queen (2006) 80 ALJR 497; [2006] HCA 2 that a basic entitlement of an accused person in a criminal trial is an impartial tribunal, and to the extent that the tribunal is shown not to have been impartial, a basic departure has occurred in the observance of fundamental rights inhering in the accused as a human being: [41] and [48]. I agree with Mr Hutley SC that the statements made by the trial judge and the context in Antoun are not apposite to this case. Nonetheless, I accept that issues of impartiality are especially acute in a contempt application that is adjudged to the criminal standard and has serious consequences for Mr Johnson and Ms Sabo.

54    To be added to this is the voluminous material that was filed in relation to the 2025 Judgment. At [5]–[6] of the 2025 Judgment is a list of the 14 affidavits which were read, which ran to several thousand pages including annexures. The application book for the interlocutory hearing exceeded 5,000 pages. Some of that material may not ultimately be evidence in the Contempt Applications. There is a risk, however, that such material, which I had regard to in forming my views in the 2025 Judgment, might be perceived by the hypothetical observer to influence my decision-making in the Contempt Applications: CNY17 at [27]–[28] (Kiefel CJ and Gageler J), [51], [92], [97] (Nettle and Gordon JJ) and [111] (Edelman J), GetSwift at [3], [39], Global Capital Property Fund Limited (in liq) v Point Bay Developments Pty Ltd [2025] FCA 1597 at [45] (Neskovcin J).

55    Turning to consider the reasonableness of the asserted apprehension, I accept that, whilst I made findings about the First Lewin Affidavit and the Second Lewin Affidavit on a prima facie basis, the unqualified language is capable of conveying actual persuasion which might leave a reasonable observer with the impression that those findings could influence my determination of the same issues in the Contempt Applications. In particular, given the gravity of my findings in the 2025 Judgment – that prima facie, Mr Johnson had committed fraud – a fair-minded lay observer might reasonably doubt that I will be able to eradicate the effect of those findings when endeavouring to deal fairly and impartially with the same issues in the Contempt Applications. In Livesey it was recognised that the lay observer might reasonably apprehend that a judge who has found a state of affairs to exist, or who has come to a clear view about the credit of a witness, may not be inclined to depart from that view in a subsequent case. It is a recognition of human nature that, while a judge has an ability to discard irrelevant information, the “human frailty” of the decision-maker and the subconscious effect the extraneous information might have in influencing the judge’s final decisions nevertheless continue to be material: GetSwift at [3].

56    Villawood submits that the findings I made in the 2025 Judgment are not “live matters” in the Contempt Applications because the impugned conduct has largely been admitted in the defence filed by Mr Johnson in the substantive proceeding. In particular, Mr Johnson has admitted that the First Lewin Affidavit was false and that he knew it was false when Mr Lewin swore it. But Villawood accepts that Mr Johnson denies that he sought to mislead Villawood and the Court and denies giving deliberately false evidence in the Second Lewin Affidavit.

57    First, Mr Johnson’s intention in providing the impugned instructions will be critical to whether a criminal charge of contempt can be made out.

58    Second, senior counsel for Mr Johnson, Mr Neil Clelland KC, submitted orally that there is a real question that will need to be determined in the Contempt Applications as to whether Villawood can rely upon the admissions in the defence to prove criminal charges, and in that regard Mr Johnson referred to Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1990) 170 CLR 70 at 100. While I do not need to determine that question for the purposes of the Recusal Applications, it shows that the issues are aptly described as “live issues” and are not matters which have largely been agreed. In addition, Mr Clelland KC informed me that the pleadings are subject to various strike out applications which may affect some of those admissions.

59    Further, I take comfort in my finding as to the reasonable apprehension of bias from the following comments from Mahoney JA at 442 in Australian National Industries Ltd v Spedley Securities (in liq) (1992) 26 NSWLR 411:

The court … has indicated that a previous decision of the same fact or upon the credibility of a relevant witness will create such an apprehension, normally if not inevitably.

60    Similarly, Kirby P said in the same case at 423:

Where the findings made are emphatically expressed upon issues arguably crucial to subsequent litigation and where that litigation involves matters concerned with the vital interests of the parties, the high measure of stringency required by the law must be scrupulously observed.

61    I am also not persuaded by the submission from Villawood that a fair-minded observer would have understood that the findings I made in the 2025 Judgment were expressed on the basis that I had not seen Mr Johnson or Ms Sabo give evidence about what they each said occurred in relation to the Lewin Affidavits. I refer again to the statement in GetSwift at [34] that “[i]t is always to be kept in mind that the observer is a layperson and not a lawyer”. In particular, in QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15, Kiefel CJ and Gageler J (as his Honour then was) said at [48]–[49]:

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.

…

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.

62    A reasonable observer may be taken to understand that I was applying the standard applicable to an interlocutory application, in circumstances where neither Mr Johnson nor Ms Sabo gave evidence. However, I do not consider that such an observer should be attributed with an unduly sophisticated understanding of a judge’s ability both to determine an interlocutory application on the material then available and, subsequently, to approach the same issues with an open mind in light of fresh evidence adduced in related proceedings. They are not “steeped in the adversary process” and do not have “a cultivated sense of the ethics of the legal profession and the profundity of the judicial oath”: at [48]. I find that it is appropriate that I recuse myself from hearing the 7 April 2026 Contempt Applications against Mr Johnson.

63    The position in respect of the third contempt charge against Mr Johnson (the alleged failure to produce documents in response to the NTP) is slightly different. Mr Johnson submits that a hypothetical observer might reasonably apprehend, having found that Mr Johnson had deliberately sought to mislead the court about the DMA, that I might not be impartial in determining whether any non-production by Mr Johnson in response to the NTP was in fact deliberate and wilful. On the other hand, Villawood submits that I “gave every benefit of the doubt to Mr Johnson” because he had not given evidence and, therefore, that would indicate to a reasonable person that I had not formed a concluded view on the issues in the 2025 Judgment and reinforces that the findings were made to the prima facie standard. I accept Mr Johnson’s submission that my findings in relation to the NTP do not diminish the apprehension said to arise from my findings of Mr Johnson giving, and his purpose in giving, false instructions to his lawyers. It is appropriate that I recuse myself from hearing the 9 July 2026 Contempt Applications against Mr Johnson.

64    Finally, in relation to Ms Sabo, in my view her interests cannot be sufficiently disentangled from the charges against Mr Johnson. I also think that the issues as they relate to Ms Sabo, who is not a party to the substantive proceedings, has not filed a defence or other pleading, and has not gone into evidence in this proceeding, are very much ‘live’.

Disposition

65    For these reasons, I will recuse myself from hearing the Contempt Applications and refer the applications to the National Operations Registrar for reallocation to another judge. I will give the parties an opportunity to provide submissions of no more than four pages on the appropriate costs orders to be made.

Associate:

Dated:    17 September 2026

SCHEDULE OF PARTIES