Federal Court of Australia

IG Power (Callide) Ltd v CS Energy Limited [2026] FCA 1629

ORDERS

THE COURT ORDERS THAT:

1.    The matter be referred to the National Operations Registry for allocation to another judge of this Court.

2.    There be no order as to the costs of the respondents’ interlocutory application filed 29 July 2026.

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

REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

1    On 25 May 2021, the turbine of power unit C4 (Unit C4) at the Callide C Power Station (Callide C) in Biloela, Queensland, was destroyed after it suffered a kinetic disintegration that caused an explosion (C4 Incident). That event, together with others, spawned several legal proceedings relating to, variously, the administration of one of the joint venture owners of Callide C, the work undertaken in the course of that administration, the rights of the joint venturers, an insurance claim in relation to loss suffered as a result of the explosion, and a claim by the Australian Energy Regulator (AER) seeking declarations and civil penalties for contraventions of the National Electricity Rules (NER) (collectively, the Callide Matters). All of the Callide Matters were allocated to my docket and, with one exception, have been resolved by agreement or determination.

2    By these proceedings, IG Power (Callide) Ltd (IGPC), one of the joint venture owners of Callide C, claims that the C4 Incident was caused by various failures by the operator and manager of the plant, CS Energy Ltd (CSE). It also seeks to attribute responsibility to CSE’s subsidiary, Callide Energy Pty Ltd (CEPL), which was the other joint venture owner of Callide C. Until now, it has not been necessary for the Court to make any findings as to the cause of, or the responsibility for, the C4 Incident. Though it was relevant to the insurance claim, that matter resolved before the close of pleadings. The proceedings commenced by the AER resulted in the imposition of a civil penalty upon Callide Power Trading Pty Ltd (CPT) – the entity responsible for trading electricity produced at Callide C – for contraventions of the NER which, so it was alleged, resulted in the explosion. However, that decision was made on the basis of a statement of agreed facts between the parties, neither of whom is part of these proceedings. As for the other Callide Matters, in some, the cause of the C4 Incident was irrelevant to the issues between the parties, while in others, the identity of the person(s) responsible was incidentally or tangentially relevant. In the present proceedings, however, questions of causation and liability are directly in issue for the first time.

3    By the present application, the respondents, CSE and CEPL, seek an order that the proceedings be reallocated to another judge of this Court. The substance of the application is that, due to my involvement in the Callide Matters, and by reason of some observations and comments which I have made in the course of dealing with those proceedings, it is appropriate that I recuse myself. They rely upon the well-established principle that a judge should not hear a matter if, in all the circumstances, a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide: Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, 344 – 345 [6] (Ebner). Quite rightly, this test, which is sometimes described as the “double might” test, sets the bar for its satisfaction rather low. Indeed, it is sufficient to establish a mere possibility, rather than a probability, that the judge might not bring an impartial and unprejudiced mind to the resolution of the matter.

4    It is worth noting here that, generally, judges of this Court have no ability to determine or influence the allocation of matters to their dockets. They are required to deal with the matters allocated to them, irrespective of the process by which the allocation occurred. Relevantly, it appears unlikely that the Callide Matters, and indeed the present proceedings, were allocated to my docket at random. Rather, it might be surmised that the allocations were made for reasons of efficiency, given my familiarity with the factual and procedural context arising from the earlier proceedings. The one exception to that general assumption is QUD541/2023, which came before me on 11 December 2023 as the Commercial and Corporations Duty Judge. The parties sought directions for an urgent hearing, and I was prepared to accommodate them by setting the matter down before me during the non-sitting period in January 2024. Otherwise, the allocation of the Callide Matters to my docket has occurred without my involvement.

5    Nevertheless, as the respondents point out, I have managed, heard argument in, and published reasons in, several proceedings arising out of the C4 Incident. This, in their submission, gives rise to two bases upon which the Ebner test might be established. The first is my familiarity with a report prepared by Dr Sean Brady, a forensic engineer, which contains a detailed and comprehensive assessment of the C4 Incident and its potential causes. The findings in that report substantially overlapped with the statement of agreed facts upon which I relied when imposing a $9 million penalty on CPT in the AER proceedings. Those findings are now relied upon by IGPC as the foundation for a substantial part of its claim against CSE. Though no defence has been filed, I was assured at the hearing of this application that the cause of the C4 Incident will be in issue. That being so, the veracity of Dr Brady’s findings, with which I have become familiar and which overlap with factual propositions upon which I have previously acted, is likely to be contested. In those circumstances, whilst no actual bias is alleged, the respondents submit that a fair-minded lay observer might apprehend that I might not bring an impartial and unprejudiced mind to determining the cause of, and responsibility for, the C4 Incident. Conversely, IGPC submits that the application is premature because it is not presently clear, in circumstances where pleadings have not closed, whether the respondents will accept or contest the findings in Dr Brady’s report.

6    The second basis relied upon by the respondents is that, in the course of dealing with the Callide Matters, I have made observations and comments relating to the cause of, and responsibility for, the C4 Incident. Whilst it is not suggested that any of those observations or comments, taken alone, might form the basis of a claim of apprehended bias, the respondents contend that their cumulative effect is sufficient to satisfy the Ebner test.

7    For the reasons which follow, the respondents’ application should succeed on the first basis. I accept that my familiarity with Dr Brady’s report, together with my previous acceptance of and reliance upon agreed facts which substantially overlapped with his findings, is sufficient to satisfy the test in Ebner. However, as to the second basis, the observations and comments relied upon are insufficient, whether viewed individually or cumulatively, to give rise to a reasonable apprehension of bias.

Background

8    The background facts which underpin this application are largely not in dispute. They are set out in the following paragraphs.

The Callide C entities

9    Pursuant to a Joint Venture Agreement dated 11 May 1998 (as amended from time to time), IGPC and CEPL became parties to an unincorporated joint venture, by which each owns a 50% share of Callide C. Callide C comprises two generating units known as Unit C3 and Unit C4.

10    CEPL is a wholly owned subsidiary of CSE, which is a Queensland government-owned corporation.

11    Callide Power Management Pty Ltd (CPM) was appointed by IGPC and CEPL as the manager of the joint venture. IGPC and CEPL each own a 50% share of CPM.

12    CPT is also owned by IGPC and CEPL in equal shares. It is a “Registered Participant” under Chapter 2 of the NER and is subject to the obligations that apply to such entities. It is also an intermediary registered by the Australian Energy Market Operator (AEMO) as a “Generator” on behalf of CEPL and IGPC. The main function of CPT is the trading of electricity produced by Callide C in the National Electricity Market on behalf of IGPC and CEPL, pursuant to separate agreements with them.

13    CSE is the operator of Callide C pursuant to two agreements. The first is the Callide Power Project Operation and Maintenance Agreement dated 11 May 1998 (as amended and restated on 5 June 2017) (O&M Agreement), and the second is the Callide Power Project Station Services Agreement dated 11 May 1998 (as amended and restated on 5 June 2017).

14    The respondents assert, though it is not necessary to decide for present purposes, that CSE provides services to assist CPT to perform its obligations under the NER and the “Performance Standards for Callide Power Plant” dated 29 August 2008 (Callide Standards). They also contend that those are the applicable “performance standards” with which Callide C’s plant and facilities are required to comply pursuant to r 4.15(a)(1) and cl 5.2.5(a)(1) of the NER.

The failures at Callide C

15    A number of incidents have occurred at Callide C which have been, either alone or in combination, the catalyst for the present litigation. They were:

(a)    the C4 Incident on 25 May 2021;

(b)    an incident on 31 October 2022, which involved failures in relation to the cooling tower of power unit C3 (Unit C3) (C3 Cooling Tower Incident); and

(c)    an incident on 4 April 2025, involving the Unit C3 boiler (C3 Boiler Incident).

The prior proceedings

16    Following the C4 Incident and the C3 Cooling Tower Incident, administrators were appointed to IGPC and its related companies. One of IGPC’s parent companies, Sev.en Gamma a.s. (Sev.en), became dissatisfied with the manner in which the administrations were being conducted, and commenced an action (QUD541/2023) seeking the appointment of special purpose administrators (SPAs). The purpose of the appointment was to investigate the cause(s) of the C4 Incident and the C3 Cooling Tower Incident, and any claims available to IGPC arising therefrom.

17    Other actions were commenced in relation to the administrations, all of which were allocated to my docket:

(a)    QUD155/2023, which was an action commenced by the then general purpose administrators (GPAs) of IGPC on 21 April 2023. By an order of 11 April 2024, this matter was case managed and heard together with QUD185/2024;

(b)    QUD185/2024, which was an action commenced by Sev.en seeking orders removing the GPAs and replacing them with the SPAs; and

(c)    QUD403/2024, which was brought by the SPAs in respect of the conduct of IGPC’s administration.

18    CEPL also commenced an action (QUD572/2023) against its insurers for indemnity for losses arising out of the C4 Incident. CSE was subsequently joined to that action as part of the insurers’ cross-claim, but the proceedings were ultimately resolved prior to trial. An issue in that action was whether CSE’s employees, who were allegedly responsible for the operation and management of Callide C and Unit C4 on a day-to-day basis, were persons that had the authority to exercise administrative or executive control over CEPL, such that they were “Representatives” of CEPL within the meaning of the relevant insurance policies. In this sense, an issue of agency or authority was an important aspect of the matter.

19    QUD61/2024 was commenced by the AER against CPT seeking declarations and civil penalties for contraventions of the NER arising out of the C4 Incident. On 4 February 2025, based on facts agreed between the parties, I made declarations of contravention against CPT and imposed a penalty of $9 million: Australian Energy Regulator v Callide Power Trading Pty Ltd [2025] FCA 32 (Penalty Judgment).

The present proceedings

20    By these proceedings, IGPC claims that CSE and CEPL are liable to it for the loss and damage which it sustained by reason of the three incidents at Callide C. In relation to the C4 Incident, the statement of claim relies heavily upon the findings contained in Dr Brady’s report, to which reference is made on many occasions.

21    In the first instance, the statement of claim alleges misleading or deceptive conduct, within the meaning of that term in the Australian Consumer Law, by CSE in several respects, namely:

(a)    by making representations to IGPC that its process safety practices were of a certain standard, which are said to be false or made at a time when CSE did not have reasonable grounds for so representing;

(b)    by failing to disclose to IGPC, or inform IGPC of, certain matters regarding CSE’s process safety systems, processes and practices;

(c)    by failing to disclose to IGPC, or inform IGPC of, certain matters leading up to the C4 Incident and the C3 Cooling Tower Incident; and

(d)    by making false or misleading representations about goods or services concerning the C3 Cooling Tower.

22    IGPC further alleges that CSE breached the O&M Agreement by reason of certain failures which are said to have caused the three incidents. Those failures are also said to found a claim in negligence.

23    As to CEPL, it is alleged that the knowledge of certain CSE employees should be attributed to CEPL and that, on that basis, it was also in breach of the Australian Consumer Law and the Joint Venture Agreement with IGPC. This is a not insignificant aspect of the claim, and it is founded upon allegations that the directors of CEPL held senior executive roles at CSE and that CSE was a shadow director of CEPL.

24    The claimed loss includes the costs of IGPC’s administration, on the basis that CSE’s conduct caused both the C4 Incident and the C3 Cooling Tower Incident, which deprived IGPC of income and resulted in its directors placing it into voluntary administration.

The principles relating to apprehended bias

The Ebner test

25    There is no contest between the parties as to the principles which ought to be applied in applications of this nature. They have been restated on numerous occasions in recent times.

26    The general statement of principle is found in Ebner at 344 – 345 [6]:

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 relating to waiver (which is not presently relevant) or necessity (which may be relevant to the second appeal), 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.

27    In QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2023) 279 CLR 148 at 159 – 160 [26] (QYFM), Kiefel CJ and Gageler J observed that two foundational propositions underpin the principle in Ebner. The first is that impartiality is an indispensable aspect of the exercise of judicial power, and the second is that bias, whether actual or apprehended, connotes the absence of impartiality, such that it goes to the root of a court’s jurisdiction and negates judicial power.

28    The test, which has been described as relatively undemanding: QYFM 205 [175]: requires two or, perhaps, three steps: SunshineLoans Pty Ltd v Australian Securities and Investments Commission (2026) 100 ALJR 489, 502 [60] (SunshineLoans).

29    The first step is the identification of what it is said might lead a judge to determine a case other than on its legal and factual merits: Ebner 345 [8]; QYFM 163 [38]. In other words, it is the identification of some matter or fact which has the potential to adversely distort the decision-making process.

30    The second step requires an articulation of the logical connection between the matter identified in the first step and the feared deviation from deciding the case on its merits: Ebner 345 [8]; QYFM 163 [38]. An important aspect of this step was identified by Beech-Jones J in SunshineLoans at 523 [175], where his Honour said (citing QYFM at 175 [81]):

[175]    With respect to the second step, the “articulation of the logical connection” means that “[i]t must be explained” and not just asserted that the existence of the identified factors might give rise to the apprehended deviation…

31    Some cases have identified a possible third step, being an assessment of the reasonableness of the connection identified in the second step from the perspective of the fair-minded lay observer: QYFM 163 [38]. In other words, the party fearing bias must “identify an objectively credible reason why the judge might lack the requisite impartiality to decide the case”: SunshineLoans 499 [42].

32    This step emphasises that, in applications of this kind, no question arises as to how the judge will, in fact, approach the matter. The question is one of possibility, in the sense of a real and not remote chance, as opposed to probability: Ebner 345 [7]; QYFM 163 [37]; SunshineLoans 499 [40]. In this sense, the test is purely objective, though it is not one that should be reached lightly: Re JRL; Ex parte CJL (1986) 161 CLR 342, 371; QYFM 171 – 172 [69]. Indeed, it must be firmly established: GetSwift Ltd v Webb (2021) 283 FCR 328, 336 [28] (GetSwift).

33    When undertaking the third step, it is the Court’s assessment of the public’s view that is relevant, not its own view: QYFM 165 [45]. In this way, the hypothetical fair-minded lay observer is a construct which provides the “standard by which the courts address what may appear to the public served by the courts to be a departure from standards of impartiality and independence which are essential to the maintenance of public confidence in the judicial system”: Charisteas v Charisteas (2021) 273 CLR 289, 299 [21].

34    Central to the second and third steps in this analysis are the relevant characteristics which are to be assumed of the hypothetical fair-minded lay observer. Recent authorities have identified the following:

(1)    As a lay observer, they are a member of the public, not legally qualified nor familiar with the law and judicial process: Webb v The Queen (1994) 181 CLR 41, 52 (Webb); Vakauta v Kelly (1989) 167 CLR 568, 585.

(2)    They are taken to be aware, or reasonably well informed, of the nature of the decision or question which the judge is required to decide, the context in which it is to be made, and the circumstances leading to it: Isbester v Knox City Council (2015) 255 CLR 135, 146 [23] (Isbester); SunshineLoans 499 [40], 503 [69], 524 [178].

(3)    They are taken to consider the issue in the context of ordinary judicial practice. This includes the dialogue between Bench and Bar, by which Counsel are assisted by hearing the tentative opinions of the judge and are afforded an opportunity to respond: Johnson v Johnson (2000) 201 CLR 488, 493 [13] (Johnson).

(4)    Relatedly, they are aware that it is not uncommon for judges during hearings to express tentative views as to the issues for determination: Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577, 610 [112].

(5)    They are broadly aware of the material objective facts, as distinct from having a detailed knowledge of the relevant law or of the character or ability of the decision-maker: Webb 73; CNY17 v Minister for Immigration and Border Protection (2019) 268 CLR 76, 99 [58] (CNY17); QYFM 165 – 166 [48], 172 – 173 [72]; SunshineLoans 524 [178].

(6)    They are neither complacent nor unduly sensitive or suspicious: QYFM 165 [47]; Johnson 509 [53]. They do not make snap judgments and are aware of commonplace things: Martin v Norton Rose Fulbright Australia (No 2) [2020] FCAFC 42 [21].

(7)    They are cognisant of “human frailty”: QYFM 165 [47]; Ebner 345 [8].

(8)    They understand that information and attitudes “consciously and conscientiously discarded might still sometimes have a subconscious effect on even the most professional of decision-making”: CNY17 90 [28]; QYFM 165 [47].

(9)    They can be taken to understand that a 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’”: QYFM 165 – 166 [48], quoting CNY17 90 [28].

(10)    They are not “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”: QYFM 166 [49].

(11)    They are not presumed to reject the possibility of prejudgment: British American Tobacco Australia Services Ltd v Laurie (2011) 242 CLR 283, 333 [144]; Livesey v New South Wales Bar Association (1983) 151 CLR 288, 299 (Livesey).

35    Though the characteristics of the hypothetical fair-minded lay observer do not change, each case must ultimately be determined by reference to its particular circumstances: Livesey 299 – 300. Necessarily, there is no inflexible rule as to the matters which a reasonable lay observer might take into account, though it is often said that the following factors are relevant to the determination of whether the third step has been satisfied:

(1)    Judges are able to decide factual matters on the material that is in evidence and are aware of the possibility of the evidentiary position changing: GetSwift 338 [35].

(2)    Judges can cast from their minds evidence of a prejudicial nature which is not relevant to determining the matter before the Court: GetSwift 338 [35].

(3)    The reasonableness of an apprehension of bias is assessed in the context of ordinary judicial practice: SunshineLoans 499 [40], 504 [69].

(4)    The legal, statutory and factual contexts and circumstances in which the decision is made: SunshineLoans 499 [40], 524 [178]; Isbester 146 [20].

(5)    “[T]he nature of the decision and its statutory context, what is involved in making the decision and the identity of the decision-maker”: Isbester 146 [23].

(6)    The possibility of human frailty, human nature and unconscious bias in the decision-making process: Kirby v Centro Properties Ltd (No 2) (2011) 202 FCR 439, 449 [59] (Centro Properties (No 2)).

(7)    Judges are human, not a “passionless thinking machine” or a robot assessing information: GetSwift 341 [46]; CNY17 90 [28].

Particular cases

36    Though each case requires the application of the Ebner test to its own facts, there is a small category of case in which it is largely axiomatic that a judge should recuse themselves. For instance, where a judge has a not insignificant financial interest in the matter, or where a judge has, in earlier proceedings, expressed a clear view 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”: Livesey 300; SunshineLoans 499 – 500 [43]. Similarly, where a judge expresses a preconceived view about the credit of an essential witness, in a case which may turn on credibility, it tends to follow that the “double might” test will be satisfied: R v Watson; Ex parte Armstrong (1976) 136 CLR 248, 264 – 265; cf SunshineLoans.

37    If prejudgment is found to exist, the judge in question must recuse themselves. However, in modern litigation, judges commonly hear and determine interlocutory matters that touch upon issues to be resolved at the final hearing. Applications for interlocutory injunctions are an obvious example of this, as they require consideration of the applicant’s prospects of success. Importantly, judges are acutely aware that such issues are not finally determined at the interlocutory stage and will be revisited at trial on the basis of more fulsome evidence and submissions. That being so, the fact that a judge has made an interlocutory decision will not ordinarily prevent him or her from presiding over the trial.

38    A useful example of this is Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427 (Michael Wilson). There, the primary judge had heard and determined several ex parte interlocutory applications, and confidentiality orders were made about the conduct of those applications. The majority of the High Court (Gummow ACJ, Hayne, Crennan and Bell JJ) held that no apprehended bias was established in relation to the judge continuing to hear the matter. Their Honours considered (at 447 [70]) that the fact that the primary judge had made several ex parte interlocutory orders and, on each occasion, directed that those applications, the supporting material, the reasons for making the orders and the orders themselves not be disclosed to one side of the litigation, did not found a reasonable apprehension of prejudgment of the issues that were to be fought at trial. Importantly, their Honours noted that none of the applications required the judge to make any determination of any issue that was to be decided at trial. Nor was he required to make any finding about the reliability of any party or witness or make a choice between competing versions of the relevant events (at 448 [72]). Rather, his Honour’s task was limited to ascertaining whether there was apparently credible evidence of a sufficient risk of dissipation of assets to warrant making the confidentiality orders.

39    Michael Wilson illustrates the need for precision in the articulation of the relevant logical connection in the second step of the Ebner test and the nuances which may arise in doing so. While no apprehension of bias arose in that case, the outcome might have been different if the interlocutory hearings had required the judge to make an adverse credit finding, or if he otherwise made comments that gave rise to a reasonable apprehension of prejudgment.

40    The facts of GetSwift bear some similarity to the present. There, the appellant was a defendant in two separate proceedings, one a class action and the other a civil penalty proceeding brought by the Australian Securities and Investments Commission (ASIC). Both concerned allegations that the appellant had breached its continuous disclosure obligations under the Corporations Act 2001 (Cth) and that it had engaged in misleading or deceptive conduct. The matters were both listed to the docket of the primary judge, who had resolved to hear the civil penalty matter prior to the class action matter, but deliver judgment in both at the same time. The appellant applied for the judge to recuse himself from hearing the class action matter on the basis that he might be subconsciously influenced by extraneous information from the earlier civil penalty hearing. That extraneous information included evidence from at least 30 lay witnesses and an expert, as well as the submissions advanced by the parties. The Full Court held that the primary judge should have recused himself on the basis that a fair-minded lay observer would apprehend that natural human frailty and the subconscious effect of the extraneous matter might affect his ability to decide the matter on its merits.

41    After identifying the relevant principles, the Full Court made the following observations in relation to a judge’s use of extraneous information (at 338 – 339 [38]):

[38]    A reasonable apprehension of bias may arise from the decision-maker receiving extraneous information, including knowledge of some prejudicial but inadmissible fact or circumstance. This ground is not dependent on showing that the decision-maker might have prejudged the issues by making particular findings or rulings on the extraneous information. It is also not necessary to show that the information has in fact worked to the prejudice of the applicant — it is enough that it might do so: Re JRL at 349 (Gibbs CJ) citing Kanda v Government of Malaya [1962] AC 322 at 337-338.

42    The Court further observed (at 339 [39]) that, even where a decision maker has not consciously considered the extraneous information, a reasonable apprehension of bias can arise from the subconscious influence of the material. Their Honours considered that to be a risk which cannot be cured by simply putting the information aside, because reason cannot control the subconscious influence of feelings of which it is unaware: see Public Utilities Commission of the District of Columbia v Pollak (1952) 343 US 451, 466 – 467, cited in CNY17 89 – 90 [27].

43    Later in the reasons, the Full Court observed (at 340 – 341 [44]):

[44]    Whilst then a judge is understood by the hypothetical observer to be able to discard the irrelevant, the immaterial and the prejudicial, and decide cases solely on the material that is in evidence, there still remains the possibility of apprehension of bias in respect of judicial officers seized of extraneous information. Otherwise, there would be no place for the recognition of human frailty and human nature which are accepted aspects of the approach of the fair-minded lay observer in considering apprehension of bias.

44    Of course, that is not to say that a judge should recuse themselves merely because they have viewed inadmissible material. Judges regularly consider material in order to determine its admissibility, and there is usually no question that they may continue to hear the matter after doing so. Indeed, in some cases, evidence can be held to be admissible against one of a number of defendants and, even in those circumstances, no issue of apprehended bias would generally arise. Similarly, it is a well-established practice in conspiracy trials that jurors may be asked to apply evidence in relation to some of the alleged co-conspirators but not others.

45    In GetSwift, the Court distinguished the case from a judge merely determining the admissibility of evidence. Rather, it considered determinative both the scale of the material in issue and the fact that the judge was simultaneously expected to keep it in mind for one matter but disregard it for the other. At 341 [46], the Court held:

In our view, the hypothetical observer would recognise that judges are human, not a “passionless thinking machine” (CNY17 at [28] (Kiefel CJ and Gageler J) quoting Re JP Linahan Inc 138 F (2d) 650 at 653 (1943)) or robot just assessing information. In the circumstances before the primary judge, there is a real difficulty of disregarding the extraneous information. The primary judge is not being asked to disregard the evidence of one witness, on a discrete topic, heard at a remote point in time. This case is removed from the “everyday duty of a judge at first instance to sift inadmissible from admissible material”: R v Leckie; Ex parte Felman (1977) 52 ALJR 155 at 158; 18 ALR 93 at 99 (Gibbs J) (R v Leckie). In contrast to the present case, when a judge rules evidence inadmissible, he or she is generally not required to return to it again.

46    Therefore, it appears that the underlying concern was that the ability to disregard evidence may be diminished in circumstances where the evidence is both substantial and is to be kept in mind for the purposes of resolving separate, yet related, proceedings.

47    There are other cases in which it has been determined that particular scenarios do not, prima facie, give rise to apprehended bias. For instance, it does not arise merely from a primary judge having made adverse findings: Kazal v Thunder Studios Inc (California) (2023) 416 ALR 24, 97 – 98 [260]. That remains true even where the findings include strong adverse credit findings, and are ultimately found to have been wrongly made on appeal.

48    It has also been said that determinations by judges on the basis of agreed facts are not likely to attract apprehended bias. In Australian Competition and Consumer Commission v SIP Australia Pty Ltd (2000) ATPR ¶41–786 at 41,360 [18] (ACCC v SIP), Goldberg J rejected an application for his recusal based on findings made, and penalties imposed, by reference to agreed facts. His Honour emphasised that he had not resolved any contested issues of fact, and that his findings were based entirely on the agreed facts placed before him. He distinguished the authorities relied upon by the applicant on the basis that they concerned cases in which the judge had been required to determine disputed factual issues in an earlier hearing. Accordingly, his Honour did not consider himself obliged to recuse himself where his earlier findings were based solely on an agreed statement of facts.

49    Similar observations were made in Australian Competition and Consumer Commission v Turi Foods Pty Ltd (No 3) [2012] FCA 198 (ACCC v Turi Foods). That case concerned a regulatory action against four respondent companies in respect of misleading or deceptive advertising practices. The Australian Competition and Consumer Commission (ACCC) and the first respondent, La Ionica, settled their dispute, and the Court was asked to make declarations, grant injunctions and impose a pecuniary penalty in respect of La Ionica’s admitted contraventions of the Australian Consumer Law. Tracey J made those orders on the basis of a statement of agreed facts and a joint outline of submissions. Thereafter, his Honour was asked by the remaining respondents to recuse himself from hearing the ACCC’s claims against them. His Honour rejected that application, on the basis that he had not heard from any witnesses, made any determination of credit, or expressed any clear views or made any contentious findings in relation to any issue which was likely to arise in the forthcoming trial (at [33], [42]). His Honour also considered that a fair-minded lay observer would not believe that he would find it difficult to “start afresh” (at [36]).

50    It is also useful to consider Centro Properties (No 2). There, the primary judge had made factual findings in separate regulatory proceedings, following an extensive contested hearing, that were adverse to the applicant’s interests in subsequent proceedings. His Honour had also determined that a civil penalty should be imposed in those earlier proceedings. Though he ultimately recused himself from the subsequent matter, he observed (at 449 – 450 [62]) that, had only one or two findings of fact been in dispute, the position may have been different, as a fair-minded lay observer may well have understood that the subsequent proceedings would be approached afresh. However, because the applicants sought to challenge numerous findings made in the regulatory proceedings, many of which were likely to be significant, his Honour concluded that recusal was appropriate.

51    That case aptly illustrates that the outcome of an application of this nature may ultimately turn on matters of degree, such as the extent of the extraneous material seen by the judge, the number of issues previously decided, and the significance of those issues to the subsequent matter. That evaluative exercise necessarily involves a degree of subjectivity. Whilst this begets uncertainty, it is mitigated by the fact that the Ebner test is an undemanding one, and by the need for judges to err on the side of caution in order to preserve public confidence in the integrity of the Court.

Balancing the duty to sit and the discretion not to sit

52    The application of the Ebner test must also be undertaken in light of the duty of judges to exercise their judicial functions when their jurisdiction is regularly invoked and they are assigned cases in accordance with the prevailing practice in their court: Ebner at 348 [19]. That duty is significant, as it ensures the continuance of the system by which judges do not choose cases and litigants do not choose judges. As Gordon J observed in SunshineLoans at 507 [91] (citing Ebner at 348 [20]), if a mere objection were sufficient to justify recusal, it would result in a system in which litigants could influence the composition of the bench. For that reason, courts must be astute not to accede to applications for recusal “unless it is based upon a substantial ground for contending that the judge is disqualified from hearing and deciding the case”: Ebner at 348 [19].

53    On the other hand, the plurality in Ebner left open the possibility of judges retaining a discretion to legitimately decline to hear a matter in cases of doubt, even if they are not completely satisfied that the law requires them to do so: Ebner 348 [20]; see also SunshineLoans 507 [91]. Their Honours observed that it will often be prudent for a judge to take that course “in order to avoid the inconvenience that could result if an appellate court were to take a different view on the matter of disqualification”: Ebner 348 [20]. The considerations which are relevant to that assessment include the stage at which the application is made, the practical possibility of arranging for another judge to sit, and the public or constitutional role of the court before which the proceedings are being conducted: Ebner 348 [21]; SunshineLoans 508 [92], 513 [128].

The facts in issue in these proceedings

54    Before moving to the Ebner analysis, it is appropriate to explain the difficulties that have arisen in terms of ascertaining that which is precisely in issue between the parties in these proceedings.

55    Relevantly, the statement of claim alleges that CSE commissioned Dr Brady to prepare a report on the causes of the C4 Incident, and subsequently published completed drafts of the executive summary, as well as the final report, on its website. It also asserts that CSE accepted the findings of Dr Brady by publishing the report in its press releases and in its 2024 annual report. It is not presently known whether CSE will admit or deny those allegations. However, the affidavit of CSE’s solicitor, Mr Ross Perrett, upon which CSE relied for the purposes of this application, tends to indicate that it had some involvement in commissioning the report. At paragraph 11 of his affidavit, when addressing issues relating to subpoenas served on CSE and CEPL by Sev.en, Mr Perrett states that:

Part of CSE’s production comprised various draft chapters of reports prepared by Dr Brady in relation to his investigation into the Incident.

56    That CSE had possession of draft chapters of Dr Brady’s report tends to suggest that it was involved in its commissioning. Of course, that is not a concluded view, but merely an observation arising from the presently available evidence.

57    The statement of claim then alleges that Dr Brady concluded that the C4 Incident was caused by several critical process failures by CSE, namely: (1) the failure to procure an appropriate battery charger for Unit C4; (2) the failure to repair or replace fuses in the “automatic changeover switch” (ACS) in Unit C4, despite knowing for some time that they were malfunctioning; (3) the failure to undertake any risk assessment in relation to the battery charger or the proposed switching process; and (4) deficiencies in CSE’s process safety practices and procedures which prevented it from taking those steps.

58    In broad terms, those failures are adopted in the pleading as particulars of the several causes of action in negligence, breach of contract, and contraventions of ss 18 and 29 of the Australian Consumer Law. Indeed, numerous allegations in the pleading expressly refer to Dr Brady’s report. It may also be observed, for the purposes of the present application only, that some aspects of the pleading appear to follow the structure of Dr Brady’s report, although that observation cannot be made of the pleading as a whole.

59    However, as no defence has been filed, it is not presently known whether CSE will contest the allegations as to the cause of the C4 Incident. Nor is it known whether CSE will deny its involvement in the commissioning of Dr Brady’s report, or dispute the accuracy of its conclusions.

60    In those circumstances, the respondents’ submissions as to the first step of the Ebner test – identification of the matters which might give rise to apprehended bias – suffer from a distinct lack of clarity. Nevertheless, at the hearing of the application, Counsel for CSE identified the following factual categories as likely to be in issue and relevant to the present application:

(a)    “CSE’s liability in general”;

(b)    “factual matters concerned with the ACS that have to do with whether the C4 ACS was deliberately left inoperable and whether a decision was made to proceed with the battery charger changeover knowing that the ACS was inoperable”;

(c)    “factual matters in relation to the battery charger and specifically whether the plan modification check sheet was required to be completed in accordance with the modification procedure and whether the specifications of the battery charger were such that they did not account for the battery changeover occurring with the unit online”;

(d)    “whether C4 ought to have been offline when the battery charger changeover occurred”;

(e)    “whether a failure of process or system or management, however it might be framed, was or were a cause or contributed to the cause of the C4 turbine incident and then that will also follow through to whether some system failure or management failure contributed to the cause of other issues”;

(f)    “the attribution to CEPL of knowledge and actions of CSE and responsibility for CSE’s actions”; and

(g)    “the causal consequences in relation to the administration … of the C4 Incident”.

61    With respect, those descriptions generally lack the precision necessary to identify the facts in issue. For instance, the first category does not indicate whether CSE disputes liability “in general” because it contests the circumstances in which the incidents occurred, or whether liability is denied for some other reason, such as the operation of a contractual limitation. Similarly, references to factual matters “about” or “in relation to” a particular topic do not adequately identify the precise matters said to be in issue.

62    However, regardless of that lack of certainty, the fifth category is sufficient for present purposes. It suggests that the cause of the C4 Incident will be in dispute, with the consequence that Dr Brady’s conclusions will be contested. I am obliged to accept that indication and assume that the cause of the failure of Unit C4 will be contentious in the hearing of this matter. For the reasons which follow, that is significant in the context of this application.

The factors relied upon

63    Against that background, the Ebner test may now be applied to the circumstances of this case.

64    As to the first step, it will be recalled that the respondents’ second basis of apprehended bias is not said to arise from any one previous finding, or from any particular piece of extraneous evidence. Rather, it is said that “the accumulation of the extraneous material provided and the particular views and conclusions expressed” collectively satisfy the test for apprehended bias. This renders the first step of the Ebner analysis somewhat difficult. If one of the numerous matters relied upon is found incapable of producing the effect alleged, must the Court then consider whether the remaining factors are sufficient? If so, is the Court required to undertake that exercise repeatedly, by assessing the effect of various combinations of the extraneous material and the views expressed in transcripts and earlier reasons?

65    Despite those difficulties, it is necessary to traverse the matters relied upon to ascertain whether they are capable of having, or contributing to, the effect alleged. This is best done chronologically through the previous cases. In doing so, I consider each matter said to give rise to apprehended bias and assess whether it could reasonably support the apprehension alleged before turning to the cumulative effect of those matters as a whole.

Sev.en’s application to appoint SPAs to IGPC – QUD541/2023

66    In QUD541/2023, Sev.en sought to have SPAs appointed to IGPC to conduct investigations into the C4 Incident and the C3 Cooling Tower Incident. It was alleged that the existing GPAs had not complied with their statutory obligations by failing to investigate the cause of the two incidents as well as the existence of potential claims against any third parties.

67    As appears from the reasons for decision in that matter: Sev.en Gamma as v IG Power (Callide) Pty Ltd (administrators appointed) (2024) 172 ACSR 136: a central issue was whether the GPAs had made any substantial assessment of any potential claim that IGPC might have against CSE. The possibility of such a claim was significant, given that CSE was the operator and manager of Callide C pursuant to the O&M Agreement. The absence of any assessment by the GPAs was relevant to whether the SPAs should be appointed in order to undertake the necessary investigations and preserve any potential claims.

68    Orders were made appointing the SPAs. In the reasons for judgment, no finding was made that CSE was responsible for the incidents. However, observations were made as to the possibility that CSE bore some responsibility for them. At paragraph [4] of the reasons, I observed in relation to CSE:

[4]    … Its obligations under its contract of engagement were what one might expect for such an important piece of infrastructure. There is a not unreasonable inference that CSEL, as the entity having the management and control of the units, may have breached its contractual obligations or common law duties, and those breaches may have been, in some way, causative of the two units going offline.

69    The suggestion that there “may” have been a breach which “may” have contributed to the loss indicates that the concern was not whether CSE was in fact responsible for the incidents, but whether the GPAs had sufficiently investigated the possibility that it was.

70    Then, at paragraph [5], I said:

[5]    It must be stressed that it is far from certain that CSEL bears any responsibility for the damage to the units, or the loss of generation and any subsequent economic loss suffered by the joint venture participants. That is a matter to be determined, if at all, in the future. Nevertheless, for present purposes, it is possible to draw an inference that failures of the kind that ultimately took place are unlikely to have occurred, in the ordinary course, to power generating units that were properly maintained and operated.

71    That paragraph emphasised that the observations as to the possible causes of the incidents were made only for the purposes of the application then before the Court. Indeed, it expressly stated that the determination of who was, in fact, responsible was to occur in the future.

72    The same can be said of paragraph [142] of the reasons, upon which the respondents also rely in the present application:

[142]    … [CSE] had the contractual obligation to manage, maintain and operate the power units and, in the ordinary course, it is unlikely that such catastrophic failures would have occurred without some wrongful act or omission on its part. That is not to make a finding that it is culpable or liable, of course. It is merely to point out that there is a significant possibility that it might subsequently be found to be, in the circumstances as they are presently known…

73    The scope and adequacy of the investigations which had been conducted by the GPAs were addressed in paragraph [146]. The GPAs had indicated that they were awaiting receipt of a report from Dr Brady which, so it was said, had been commissioned by CSE. It was noted that the GPAs had no right to receive a copy of the report, which constituted one reason for rejecting the submission that appropriate investigations had been pursued:

[146]    … [T]he administrators’ hope is effectively that [CSE] will gratuitously provide to them a report that it has commissioned about the incident, in circumstances where there is a likelihood that [CSE] will bear some responsibility for it. If that is indeed their position, it is not one that reasonably competent administrators who are seeking to comply with their obligations would adopt.

74    In this application, the respondents seek to rely upon the fact that paragraph [146] did not include a qualification of the kind present in earlier paragraphs. However, even without such a qualification, nothing in that paragraph, when read in context, could reasonably be understood as amounting to a final determination of CSE’s responsibility. All that is expressed is an observation about the likelihood of CSE bearing some responsibility. Though it might have been preferable to reiterate the qualification expressed earlier on multiple occasions, a reasonable lay observer reading the reasons as a whole would have understood that paragraph [146] was not intended to constitute a concluded finding of responsibility.

75    Moreover, I declined Sev.en’s invitation to make what were, in effect, substantive findings as to CSE’s responsibility for the incidents. At paragraph [197], I observed that it was “neither necessary nor appropriate for this Court to make findings in relation to the potential claims that a company in administration may have against third parties”. Thereafter, at paragraph [198], I said:

[198]        Despite Sev.en’s desire to secure some findings as to the potential causes of action, little should be said other than that the evidence establishes that there is a degree of likelihood that a number of causes of action may exist, even if their merits are unable to be ascertained at this point. Necessarily, those causes of action arise from the failures of units C3 and C4 at a time when CSE was responsible for their maintenance and operation, and the not unreasonable prima facie inference that the failures would not have occurred in the absence of some neglect or default on its part. It must be stressed that it may well be that the failures occurred in the absence of any act or omission by CSE, or it may well have conclusive defences to any claim that might be made. Indeed, those defences may arise from the Operation and Management Agreement itself, and the terms therein limiting its liability. Whether those clauses are sufficient to exclude claims made under the Australian Consumer Law (being Sch 2 to the Competition and Consumer Act 2010 (Cth)), however, is a question that will need to be determined: see Viterra Malt Pty Ltd v Cargill Australia Ltd (2023) 74 VR 1; [2023] VSCA 157 at [450], [712].

(Emphasis added).

76    That passage makes clear that the matters for determination in QUD541/2023 did not include the identity of those responsible for the incidents. All that was in issue was whether the GPAs had sufficiently investigated that question. Paragraph [198] eschews the attribution of liability to CSE, notwithstanding that CSE was the focus of Sev.en’s submissions concerning the inadequacy of the GPAs’ investigations. Indeed, the paragraph goes so far as to state expressly that CSE may have had no involvement in the incidents and, even if it were responsible for them, that it may nevertheless have a defence.

77    Nothing in paragraph [198] suggests prejudgment or any predisposition against CSE. Nor do the subsequent comments relied upon provide a proper basis for reading those express reservations as other than genuine qualifications of the views expressed.

78    True it is that Sev.en’s submission that the GPAs had failed to investigate CSE, which Sev.en had identified as being the entity most likely to bear some responsibility for the incidents, was accepted (at [76]). It was also accepted that the GPAs’ reliance on a report commissioned by CSE, despite CSE’s evident interest in deflecting any accusations of wrongdoing, meant that they had fallen short of their duties. Likewise, Sev.en’s submission that the possible claim was “extremely valuable”, potentially amounting to millions of dollars, was accepted (at [172]). Critically, however, these were expressions of possibility rather than findings of fact. That is evident from the repeated qualifications to the effect that it was not appropriate, on that occasion, to ascribe responsibility for the incidents.

79    Nevertheless, the respondents submit, for the purposes of this application, that the reasons for judgment in QUD541/2023 went beyond identifying the existence of an arguable case in neutral terms, and amounted to an acceptance that the relevant incidents would not have occurred but for a wrongful act by CSE. With respect, that conclusion would require the fair-minded lay observer to ignore the repeated qualifications throughout the reasons, as outlined above. In this regard, it is important to bear in mind that the fair-minded lay observer is taken to be aware of all the circumstances of the case. Here, that includes the express qualifications which negate any suggestion that any view about the liability of CSE was being expressed.

80    Ultimately, with respect, the reasons in QUD541/2023 addressed only whether the GPAs were properly performing their duties by investigating any possible claims against CSE. Necessarily, that involved some consideration of whether such an investigation was appropriate. Nothing in the reasons dealing with that question is suggestive of prejudgment in relation to CSE’s liability.

CSE and CEPL’s application to set aside subpoenas and object to production – QUD185/2024 and QUD155/2023

81    After the SPAs were appointed to IGPC, Sev.en applied for the removal of the GPAs. For the purposes of that application, and in response to applications brought by the GPAs, Sev.en issued a number of subpoenas for the production of documents, including to Dr Brady. CSE and CEPL applied to set aside parts of those subpoenas and objected to production of the documents responsive to the subpoena issued to Dr Brady. That objection was advanced on a number of grounds, including legal professional privilege.

82    In the course of the application for removal of the GPAs, an issue arose as to the value of any claim which IGPC might have against CSE in respect of the latter’s obligations under the O&M Agreement and, in that context, the cause of the C4 Incident was relevant. It was for that reason that Sev.en wished to consider the report prepared, or in the process of being prepared, by Dr Brady. As was noted in the reasons for judgment on CSE and CEPL’s application to set aside the subpoenas, the report was required to ascertain “the strength of any potential claims IGPC may have against [CSE]”: Sparks, in the matter of IG Energy Holdings (Australia) Pty Ltd (Administrators Appointed) [2024] FCA 613 [38].

83    One objection advanced by CSE and CEPL was that Dr Brady’s report was prepared for the purposes of obtaining legal advice. In particular, it was said that the report was commissioned because CSE foresaw several legal issues arising as a result of the C4 Incident. That being so, the central question was whether the report was, in fact, commissioned for that purpose. In that context, I observed at [102] of the reasons:

[102]    It can be accepted that one purpose for obtaining the report from Dr Brady was to seek legal advice. It is undoubted that CSEL, as the operator and manager of unit C4 was likely to face some potential legal liability following the incident. Indeed, it is not unfair to form a prima facie view that the incident may not have occurred had CSEL performed its contractual obligations. That is not to say that it did fail in its obligations, but merely that, at first instance, it appears that may have been the case. In such circumstances, CSEL would require legal advice in relation to that and a number of other issues, including its legal liability to any party, any liability which it might have under any regulatory regime relating to power generation, and making a claim on any policy of insurance which it might have.

    (Emphasis added).

84    CSE and CEPL submit that those observations suggest prejudgment. That contention is somewhat surprising, given that paragraph [102] is essentially a restatement of CSE and CEPL’s position on that application. Indeed, it is recorded elsewhere in the reasons that CSE commissioned the report because it was concerned that “a large number of legal issues were likely to arise” from the C4 Incident: see [68]. Further, CSE produced correspondence with its solicitors in which it sought advice as to, inter alia, “the legal consequences, including regulatory, contractual and other potential liabilities that may arise as a consequence” of the C4 Incident. Those were prudent actions by CSE, and they appear to have been taken in circumstances where its senior management anticipated the possibility of liability, given its role as the operator and manager of Callide C. No other reason was advanced for engaging Dr Brady or seeking legal advice. Of course, neither commissioning the report nor obtaining legal advice constituted an admission or acknowledgment of responsibility. Rather, those steps were taken to ascertain whether CSE bore any responsibility for the incident and, if so, what liability might follow.

85    Accordingly, read in context, the comments in paragraph [102] do no more than reflect the concerns that CSE had in relation to its own conduct. No finding was made that CSE had, in fact, breached any of its obligations. At most, the observations at paragraph [102] recorded that there were matters which warranted investigation and upon which differing views might ultimately be formed.

86    That being so, the observations made in the reasons do not suggest any prejudgment of liability. The only relevant issue was whether Dr Brady’s report and the other documents subject to the subpoena were exempt from production by reason of legal professional privilege or some other ground. In those circumstances, it was appropriate to record the possibility of CSE having some liability in respect of the C4 Incident. That is far removed from a conclusion that CSE would ultimately be held liable for the incident and the resultant losses. It is not likely that a fair-minded lay observer would understand the observations as indicating a mind closed to the question of liability should it arise for future determination.

GPAs’ application for an undertaking from Sev.en – QUD185/2024 and QUD155/2023

87    The respondents also rely upon observations made in Sparks, in the matter of IG Energy Holdings (Australia) Pty Ltd (Administrators Appointed) (No 2) [2024] FCA 648, which concerned an application by the GPAs for an undertaking as to damages from Sev.en. In the course of those reasons, I made the following observations under the heading, “Background”:

[6]    The failure of unit C4 in May 2021 caused substantial damage and loss of revenue for IGPC, which was ultimately placed into administration. It is possible, or even likely, that the failure of unit C4 resulted in IGPC’s insolvency and administrators being appointed to it. Sev.en, which has a substantial financial and economic interest in IGPC, was dissatisfied with the efforts of the then administrators to investigate the cause of unit C4’s failure, and sought the appointment of special purpose administrators to properly perform the investigative task. It was successful, and, as mentioned, orders were made for the appointment of the special purpose administrators.

    (Emphasis added).

88    The respondents submit that paragraph [6] suggests prejudgment of the issue of whether IGPC’s insolvency was caused by the C4 Incident. However, like many of the statements considered thus far, the paragraph is expressed in tentative terms. It does not express a concluded view. Rather, it records the possibility, or even likelihood, of a causal relationship between the two events. The use of the word “likely” does not transform the observation into a concluded finding. Moreover, the statement was made in the course of reciting the background to the application before the Court. It was not a finding reached following a contested hearing at which the parties called evidence and advanced submissions on that issue. Accordingly, the statement does not suggest that the judicial mind would be closed from further consideration of the issue.

89    The respondents also rely upon the following observation as to the relationship between CEPL and CSE in paragraph [17] of the reasons:

[17]    … It was unclear on the application whether CPM was jointly controlled by IGPC and CSE or by IGPC and CEPL. Ultimately, it does not matter as CEPL is effectively controlled by CSE…

90    It can be accepted that this statement makes an observational finding as to the relationship between two companies. However, that was not a matter in dispute in those proceedings. Nor does it appear to be in issue now: Mr Perrett, the solicitor for CSE, stated in his affidavit that “CEPL is a wholly owned subsidiary of CSE”. That suggests that it is not contentious that CEPL is effectively controlled by CSE: see Corporations Act 2001 (Cth) ss 47, 50AA.

91    The respondents further submit that the statement about control reflects some form of prejudgment in relation to the attribution of CSE’s knowledge to CEPL. Why that may be is not immediately apparent. Whilst it may be that control over another entity can lead to an attribution of knowledge “upwards” to the company in control – that being the reciprocal concomitant of a “downwards” delegation of authority – it is far from axiomatic that attribution can flow in the opposite direction: Allianz Australia Insurance Ltd v Uniting Church in Australia Property Trust (NSW) (2025) 308 FCR 308, 363 – 364 [268]. In any event, attribution was not in issue in those proceedings, and nothing in paragraph [17] can be understood as expressing any opinion on that point. Even if one were to assume that the paragraph discloses a preliminary view, it would not lead a fair-minded lay observer to conclude that the Court could not be persuaded otherwise upon fulsome evidence and submissions.

92    Therefore, the respondents’ reliance on those reasons as providing any indication of a matter relevant to the Ebner test was misplaced.

Application to remove GPAs – QUD 185/2024 and QUD 155/2023

93    The respondents also rely upon what occurred in Sev.en’s application to remove the GPAs, which was heard together with two applications brought by the GPAs. In the course of those actions, several drafts of Dr Brady’s report were produced to Sev.en, and the contents of those drafts were discussed at some length in submissions. In particular, Sev.en submitted, by reference to Dr Brady’s report, that the C4 Incident was caused in part by the failure of the battery charger during the switching sequence, which was “not fit for purpose” and “never designed or tested to operate in the specific switching sequence”. It further submitted that CSE’s procurement process, by which it acquired the battery charger, was “flawed from start to finish”. However, as it transpired, the drafts of Dr Brady’s report were not admitted into evidence in the proceedings. Though an objection had been made as to its admissibility, there was no need to rule substantively upon it, as the applications were ultimately resolved by agreement.

94    The mere exposure of a judge to irrelevant or prejudicial material does not necessarily preclude the judge’s continued involvement in a matter, even where the material concerns matters that will arise at the final hearing. It is a quotidian aspect of litigation that judges receive and consider irrelevant material tendered by parties in order to rule upon objections to admissibility. It is now well accepted that judges can put such material aside after making a ruling and continue to hear the matter: QYFM 165 – 166 [48]; CNY17 90 [28]; GetSwift 338 [35]. See, for example, Michael Wilson.

95    However, the circumstances of this matter may go beyond that general rule. Dr Brady’s report was, appropriately, addressed at length in Sev.en’s submissions. The Court was taken to many passages of the report in considerable detail, and the findings were the subject of close attention. Those findings identified failures in the operation and maintenance of Unit C4 and of its critical componentry, as well as possible deficiencies in the procurement process. Attention was also directed to findings as to organisational failures in the management of the risks associated with the replacement of the Unit C4 battery charger and the maintenance of the ACS, as well as the absence of sufficient risk controls more generally. Notably, Counsel for Sev.en submitted as follows:

… But when one has a look at the causes of the unit C4 turbine incident you can see, your Honour, that the causes were extreme incompetence by CSEL. Now – and a fundamental and cultural problem with safety and risk compliance, such that the events of that day which should have been anticipated weren’t, and avoided. So if we can see that CSEL is managing the operation in such a negligent way at this point in time, it’s not a big leap to draw the inference that the subsequent incident was similarly a product of incompetence and negligence by CSEL.

96    Whether that submission would be accepted need not be considered here, though it assists in demonstrating the extent to which the Court was addressed on the substance of Dr Brady’s report and its findings.

97    However, it is apt to keep in mind that the issue under consideration was whether the Court should admit the report into evidence and, if so, what use could properly be made of its contents. As I expressed to Counsel for Sev.en:

HIS HONOUR: Well – sorry to interrupt you – sure, but it depends upon the basis on which Dr Brady’s report can be received. I think it was Mr Clothier who made the point somewhat earlier. It’s, what, evidence of the truth of the content? Probably not. It’s not an expert’s report in your ordinary sense. You say it’s a business record of CSEL; that’s quite possible, but what is it, the fact that a reputable independent expert – that’s how he’s described by CSEL – CSEL has put out a report that says these things. Is that perhaps as far as it needs to go to say that there’s obviously a real live issue about the nature and extent of CSEL’s liability for the catastrophic failure of Unit C4?

98    Those observations, though not perfectly articulated, reveal that the Court’s attention was directed to the basis upon which Dr Brady’s report might be received and the permissible use that might be made of its contents.

99    Accordingly, on the present application, the respondents appear to be concerned about a process which occurs in courts on a day-to-day basis, namely, the consideration of material tendered by parties in order to determine whether, and on what basis, it should be admitted into evidence. Yet the fair-minded lay observer is taken to accept that judges, by reason of their experience and training, can exclude from their consideration material to which they have been exposed for the purpose of determining admissibility. Moreover, the fact that the submissions in relation to Dr Brady’s report were advanced more than two years ago supports the conclusion that they are unlikely to affect the determination of the present proceedings. On the other hand, it is relevant that the transcript of the application to remove the GPAs has been tendered on this application and, consequently, I have become re-familiarised with the material.

100    This issue is exacerbated by the lack of clarity as to the matters that will be in issue in these proceedings. CSE’s submissions appear to assume that Dr Brady’s report will not be admitted into evidence, but it appears from the statement of claim that IGPC intends to rely upon it at trial. Whether it will be entitled to do so is, of course, another question. That issue aside, it can be accepted for present purposes that CSE will contest the conclusions in Dr Brady’s report by putting the cause of the C4 Incident in issue. On that assumption, and assuming further that CSE will object to the tender of the report and that its objection will be upheld, the contents of the report might constitute “extraneous information” in relation to the issues to be determined at trial.

101    Overall, however, the mere fact that Dr Brady’s report was considered for the purpose of determining its admissibility does not, by itself, justify the conclusion that a fair-minded lay observer might reasonably apprehend that I might not bring an impartial and unprejudiced mind to the resolution of these proceedings. It must be borne in mind that it is possible any judge hearing the matter will be required to consider Dr Brady’s report in detail if the anticipated objection to its tender is made. If the objection is upheld, the trial will proceed notwithstanding that the trial judge will have considered the report in detail. It could not sensibly be suggested that the trial judge would, for that reason alone, be required to recuse themselves from further hearing the matter.

Application to extend time for second meeting of creditors – QUD403/2024

102    Next, the respondents refer to the application by the SPAs of IGPC for an extension of time in which to hold the second meeting of creditors. That application was decided in Park, in the matter of IG Power (Callide) Ltd (Administrators Appointed) (No 3) [2024] FCA 1245. In the context of determining whether CEPL might terminate a Sale Agreement for the assets of IGPC for non-satisfaction of a condition precedent by a particular date, I observed as follows:

[27]    … It is notorious that CEPL is effectively owned and controlled by the State of Queensland and that, in the course of the hearing of several applications in this Court over the past 11 months, the State of Queensland has made it clear that it is desirous of acquiring a 100% interest in the Callide Power Station. That is a fact which would be known to the administrators, and one which renders it unlikely that CEPL will terminate the Sale Agreement merely by reason of the non-satisfaction of a condition precedent.

103    The respondents appear to be concerned with my observation that CEPL is owned by the State of Queensland. However, they do not contend that the observation was wrongly made. Indeed, no statement in the reasons is said to be in error. Nevertheless, the respondents suggest that I might extrapolate from that fact an assumption that CEPL would not do anything contrary to the interests of the State. With respect, such an assumption is not readily apparent on the face of the reasons. Even if it were, the respondents have not identified any logical connection between that assumption and any issue to be determined in these proceedings.

AER penalty proceeding against CPT – QUD61/2024

104    The respondents rely heavily upon the conduct of the hearing in the AER proceedings and the Penalty Judgment published thereafter. Those proceedings, to which none of IGPC, CSE or CEPL was a party, were brought against CPT for alleged breaches of the NER.

105    Importantly, the matter proceeded on the basis of a statement of agreed facts, pursuant to s 191 of the Evidence Act 1995 (Cth) (Evidence Act). The admissions made therein were said to be for the purposes of those proceedings only. The statement relevantly included agreed facts as to the status of the ACS on the day of the C4 Incident and CSE’s knowledge of that status, although those admissions were made by CPT, not CSE.

106    The parties also made joint submissions, in which they relevantly acknowledged that:

The ACS was damaged on 13 January 2021, and had not been fixed by the time of the [C4 Incident]. CS Energy was aware of this at the time of the [C4 Incident].

107    The parties jointly submitted that CSE was aware of the absence of DC power supply redundancy during the battery charger replacement procedure, and that it should have taken steps to take Unit C4 offline so that it was not generating electricity at the time of the replacement. They further submitted that CSE’s conduct did not involve mere inadvertence, that it could have acted to avoid the risk of the incident occurring, and that its conduct resulted from a failure to have proper regard to the Callide Standards. They also submitted that CSE had not undertaken an appropriate risk analysis of the replacement process.

The concerns as to CPT’s responsibility for contravening the NER

108    In the course of the penalty hearing, a point arose as to the nature of the agreed facts, the circumstances in which the Court could act upon them, and the consequences of doing so. In that discussion, I made the following observations, to which the respondents have drawn the Court’s attention on this application:

I just wanted you to make sure that you should not think I’m going to rubber stamp that as I apprehend both parties think I’m going to do. I want you to establish that the admissions are properly made about whether this respondent is responsible, because as you know, I’m acutely aware that this about – of the matters, because I’ve been involved in a number of other matters involving Callide… I just don’t want there to be any doubt about this liability lest it be raised in some other forum to exculpate some other party.

109    The respondents rely upon those observations and submit that the reference to the “other party” must have been a reference to CSE. The inference sought to be drawn appears to be that I perceived CSE to be avoiding responsibility. That submission lacks merit. Courts are frequently concerned about making declarations between parties in circumstances where the rights or interests of others are or may be involved. Moreover, consenting parties often seek the making of declarations concerning transactions which may subsequently be proffered to third parties. For example, parties sometimes present curial declarations, made by consent, to the Commissioner of Taxation and seek to rely upon them in relation to taxation matters.

110    It should also be observed that it is the duty of a judge asked to make declarations or findings by consent to be astute as to the motivations of the parties seeking them. A judge is entitled to, and indeed should, undertake their own assessment of the veracity of the evidence presented. Even in the absence of cross-examination, a judge is entitled to reject evidence which is incredible or implausible. After all, the Court is being asked to find that a contravention of a law of the Commonwealth has occurred or to make a declaration to that effect, and to impose a penalty: see s 44AAG of the Competition and Consumer Act 2010 (Cth). Powers of that nature should not be exercised unless and until the Court is satisfied that a contravention has occurred and that the party responsible is before the Court.

111    It might also be noted that the passage upon which the respondents rely followed a discussion which began at the commencement of the hearing. Counsel for the AER had indicated that the gravamen of part of the complaint against CPT was that its protection systems did not comply with the Callide Standards. I expressed concern about that assertion because it was not apparent from the statement of agreed facts and joint submissions that CPT owned any of the relevant assets or systems. As the history of the litigation had established clearly and unequivocally, Callide C was owned by IGPC and CEPL. Counsel for the AER was asked how CPT could be treated as having any obligations or responsibilities in respect of Callide C in circumstances where it had no ownership of the plant. As the transcript reveals, the answers given to that question were not entirely clear. Ultimately, it was asserted that CPT was liable, as the “regulated entity” under the NER.

112    The concerns raised with Counsel for the AER were supported by the language of r 4.15 of the NER, which CPT was alleged to have contravened: “A Registered Participant must ensure that its plant meets or exceeds the performance standard applicable to its plant”. The use of the possessive, “its”, would suggest a relationship of ownership between the Registered Participant and the relevant plant. In circumstances where Callide C was uncontroversially owned by parties other than CPT, it appeared, at the time of the hearing, that the AER had commenced proceedings against an entity which was not the owner of the plant in question and, therefore, not able to contravene r 4.15. Of course, it was later established that the rule applied to intermediaries, such that the use of the word “its” did not create a requirement of ownership or require the Registered Participant to have any interest in the plant, but that was not apparent at the time I made the comments to which the respondents now refer. Against that background, it is not immediately apparent that the “other party” to which I referred was CSE, in circumstances where CSE was not an owner of Callide C. Rather, the statement suggests concern as to the potential responsibility of the owners of the plant, being IGPC and CEPL.

113    Later in the hearing, Counsel for the AER submitted that the NER allowed plant owners to nominate an intermediary to be responsible for the compliance with the regulations. It was put as follows:

MR DION: That’s what has happened here, and the - it goes on to say, your Honour, that:

AEMO or the AER, as the case may be, must allow that exemption -

…

if the applicant

namely, the joint venturers -

notify AEMO or AER, as the case may be, of the identity of a person as an intermediary to be registered of (sic) the applicant.

And so it’s a rather odd feature and - of the legislation that enables the registration of an intermediary as Generator rather than the owners of the generating unit, but the consequence of that is that the intermediary becomes responsible for compliance with the regulation as if it was the Generator.

114    Thereafter followed a discussion as to how the NER could impose an obligation on an entity to ensure that its plant met or exceeded the required performance standard, notwithstanding that the entity did not own the plant. During that discussion, it was submitted that “its plant” should be construed as referring to the plant owned by the joint venturers. In that context, I made a further comment upon which the respondents rely:

The word “Byzantine” comes to mind. Really, how could I possibly construe an obligation? How could I possibly construe a regulation that imposes upon an entity which is subject to multimillion-dollar penalties, an obligation to deal with property in a – to deal with property in a particular way when it has no ownership, management, or operational control over it? It’s got no power to do it. Why would I do that?

115    That statement says nothing of CSE or any liability which could possibly be imposed upon it. Rather, it reflected concern as to the suggestion that a provision apparently directed to owners of property could be construed as imposing obligations upon third parties with no ownership of, or relevant control over, the property. As the transcript shows, the concern expressed was that the intermediary was to take the blame for the conduct of the owners of the plant:

HIS HONOUR: Yes, the joint venturers failed to meet the standards, and the liability rests with the intermediary —

MR DE YOUNG: Yes.

HIS HONOUR: — by registration as an intermediary in the Rules 2.93(d)(2).

116    Again, read in context, that comment was directed to the owners of the plant, IGPC and CEPL, as opposed to CSE. It provides no support for the inference that I had formed, or was expressing, any view as to CSE’s responsibility for the C4 Incident.

117    Further, during that exchange, I perceived Counsel for CPT to be displaying criticism or concern in relation to my questions of Counsel for the AER. I perceived there to be some consternation at the Bar table as to my questions regarding the operation of r 4.15. Having so perceived, I enquired of Counsel whether the questioning was “treading on sensitive ground”, to which he eventually responded that it was “an important issue”. That was undoubtedly correct, because there was a danger that any further enquiry could tread upon the issue of which entity or entities were, in fact, responsible for the C4 Incident.

118    As the foregoing reveals, the concern expressed at the hearing was whether the Court was being asked to impose a penalty in circumstances where it was inappropriate to do so. Read in context, it is apparent that the concern was not whether CSE was attempting to evade responsibility. Rather, the fair-minded lay observer would understand that the concern arose because the owners of Callide C, IGPC and CEPL, had not been pursued.

119    Although these circumstances are complex, properly understood, the comments do not support the conclusion that a fair-minded lay observer might reasonably apprehend that I might not bring an impartial mind to the resolution of the questions in the present proceedings. Rather, the observer would understand the questioning as directed to ensuring that the power to impose a civil penalty, particularly a substantial one, was appropriately exercised.

Alleged reliance upon extraneous material

120    The respondents also rely upon observations made at the hearing of the AER proceedings as to the events leading up to, and the cause of, the C4 Incident. They submit that those observations indicate an inability on my part to put aside what I have previously heard in relation to matters which are said to be in issue in the present proceedings.

121    In the first instance, the respondents refer to a comment I made, in an exchange with Counsel for the AER, as to the reason why the battery system did not work as intended:

MR DE YOUNG: What happened, your Honour, was that when they tried to transfer over to the battery system from the main system, the battery system didn’t, in effect, kick in.

HIS HONOUR: It was a design fault in the replacement battery charge.

MR DE YOUNG: I’m not sure--

HIS HONOUR: Or not. Maybe not.

122    In this respect, the respondents submit that:

Counsel for the AER responded that he was not sure they had that in evidence: T30.6-8. Neither the SAFA nor the joint submissions referred to a design fault in the replacement battery charger; only that the replacement battery charger failed to respond quickly enough to maintain the required DC voltage: SAFA [49], [52], [73(c)(iii)]; JS [59(c)(iii)]. A fair-minded lay observer might conclude the docket judge’s observation could only be based on information that the docket judge had learned from a source other than the AER penalty proceeding.

123    There is some difficulty with the complexion which these submissions seek to place upon the statement. Read in context, the statement is properly understood as an attempt to understand that which was being put by Counsel, particularly given that it was immediately coupled with the qualification, “Or not. Maybe not.” That qualification would make clear to the fair-minded lay observer that no concluded view had been reached on the topic.

124    It should also be noted that the existence of a design fault in the battery charger does not appear to be in issue in these proceedings. The allegation made is to the effect that the battery charger did not meet the required specifications and that the procurement process was, in that respect, defective.

125    Next, the respondents rely upon my observation that “I’ve had the advantage of reading Dr Brady’s report”. Again, read in context, that was a reference to the report in its then-state which, as I was informed, was not the final version. True it is that the report was not in evidence on that occasion and not referred to in the joint submissions. However, there was considerable consistency between its substance and the matters recorded in the statement of agreed facts, and the respondents did not submit otherwise.

126    The respondents raise a similar concern in relation to the following observations, which were made during submissions about a change of CPT’s corporate culture:

But the submissions refer to corporate culture conducive to compliance. And what perhaps one might have hoped to have seen is some indication that steps had been taken for the purposes of ensuring that the system or the maintenance system or the other systems required to ensure that the power station remained or complied with the regulations, met those regulations. In other words, it’s probably because I’ve just heard too much about what preceded this – I understand the technical rectification. The question is is there a cultural rectification to ensure that, you know, whilst the system is there, it won’t fall into disrepair, it will be properly maintained and the like, because there was – as we know here, there was the battery charger that was below standard.

(Emphasis added).

127    The respondents assert that neither the statement of agreed facts nor the joint submissions referred to the battery charger being below standard. That, however, would appear to contradict the declaration jointly sought by the AER and CPT to the effect that:

… the new Callide C4 battery charger failed to respond quickly enough to maintain the required DC voltage as intended…

128    That was based on agreed evidence as to the cause of the C4 Incident, namely:

… the C4 battery charger failed to respond quickly enough to maintain the necessary DC voltage. …

and

The C4 battery charger could not recover DC voltage and resume DC power supply.

129    It would appear axiomatic that a battery charger which does not sufficiently perform the task required of it, whether by reason of its inherent capability or some fault, is below standard. Indeed, the respondents have not advanced any sensible submission to the contrary. Nevertheless, the remarks do reveal that, at the time of the hearing, I then had some remnant knowledge of Dr Brady’s report and its salient points.

130    The respondents then rely upon several comments made in the Penalty Judgment. The first is to the effect that the Court had to be satisfied that it was appropriate to make the findings sought and that the circumstances warranted the imposition of a penalty. It is not clear how such a statement could convey to the fair-minded lay observer that I would be diverted from treating the present proceedings on their legal and factual merits. Nonetheless, the respondents also refer to a number of background findings in the following submission:

The docket judge recorded that CPT did not own or operate Callide C and that the shares in CPT and Callide C itself were owned 50-50 by CEPL and IGPC. His Honour found that the ultimate owner of CEPL is CSE, and that CSE was the operator responsible for all necessary operation and maintenance of Callide C: at [36], [37] and [40].

131    Again, it is not abundantly clear why those findings are controversial, and it is not suggested that they were wrong.

132    The respondents submit further that I expressed hesitancy in the Penalty Judgment as to whether CPT was the “appropriate entity to be the subject of a penalty”. A fair-minded lay observer would disagree with that characterisation. The hesitancy expressed in the reasons for judgment was not as to whether a penalty ought instead to be imposed upon some other entity. Rather, for the reasons previously given (see supra [110] – [112]), the concern was whether CPT could have contravened the obligation in r 4.15 of the NER to ensure that its plant met or exceeded the performance standard applicable to its plant.

133    Next, the respondents refer to paragraph [116] of the Penalty Judgment, which states:

[116]    The parties agreed that there was no involvement of CPT’s senior management in the contravening conduct. Though that must be accepted for present purposes, it can be questioned whether the events – particularly the fact that the ACS was left in a damaged state for some months – are indicative of a problem higher up in the organisation, albeit perhaps not within CPT itself. That is, there was obviously more than some responsibility for the failures by the entities for whom CPT acted as an intermediary, and that is significant.

134    In this regard, the respondents submit that:

The observation made by the docket judge at [116] of the Reasons was not part of the joint submissions made by the parties to that proceedings nor contained in the agreed facts; it was an additional observation made by the docket judge which might indicate to a fair-minded lay observer that the docket judge held the view that there was a (culpable) failure “higher up” (that is, at the level of CSE) that led to the C4 Incident.

135    That submission tends to ignore the last sentence of paragraph [116], which identifies the entities to which reference was being made as “the entities for whom CPT acted as an intermediary”. Those were IGPC and CEPL, as recorded in the Penalty Judgment at [43]:

[43]     At all relevant times CPT was registered as a Scheduled Generator and a Registered Participant under Ch 2 of the NER. Further, pursuant to cl 2.9.3 of the NER, it was an intermediary registered by AEMO as a Generator on behalf of the parties to the Callide Joint Venture — that is, CEPL and IGPC. The parties submitted that CPT was therefore regulated by the NER in two respects: as a Generator and as a Registered Participant.

136    Read in that context, a fair-minded lay observer would understand the reference to responsibility “higher up in the organisation” as a reference to IGPC and CEPL, not CSE.

137    Finally, the respondents refer to a comment at paragraph [120] of the Penalty Judgment that the contraventions of the NER were avoidable. It is unclear why that might be of concern, given that such a conclusion was inherent in the statement of agreed facts and joint submissions. In particular, the parties submitted that the incident would have been avoided had Unit C4 not been generating at the time that the replacement procedure occurred. They further acknowledged that the incident did not occur through mere inadvertence.

Applications in the insurance proceedings

138    The insurance proceedings, which were managed on the Court’s Insurance List, did not advance substantially before being discontinued. It is not known what agreements were reached between the parties, if any. Nevertheless, in the course of an interlocutory hearing, a discussion took place as to whether any question or questions might be determined separately. In that context, an issue arose as to the extent to which the applicant, CEPL, agreed with the substance of Dr Brady’s report. The respondents rely upon the following observation I made in that discussion:

HIS HONOUR: Well, given that – and I know that Mr Brady’s not infallible, but what happened has been gone over with a fine tooth comb, at least in relation to some aspects of it ---

Later, I noted that the AER had also gone over the C4 Incident.

139    Again, that which the respondents seek to draw from these observations is unclear. Their submissions also fail to include the fact that I also made the following observation in that discussion:

HIS HONOUR: No. Well, it would be very helpful if that [being the facts which are agreed] could be worked out. But then again, they’re not bound by what Mr Brady said.

(Emphasis added).

140    Read in context, there is nothing in those observations which would indicate to a fair-minded lay observer that I might not bring an impartial mind to the question of the respondents’ liability for the C4 Incident. To the contrary, the express recognition that CEPL was not bound by Dr Brady’s conclusions indicates an appreciation that the issue remained to be determined.

The recent case management hearing

141    Finally, the respondents rely upon matters which arose in the first case management hearing of these proceedings. During that hearing, Counsel for CSE foreshadowed the making of this application, following which a discussion as to its basis ensued. In particular, it was put to Counsel that the Penalty Judgment was determined on the basis of agreed facts. It was then known, and was not disputed, that CPT was 50% owned by CEPL, the wholly owned subsidiary of CSE. It was also put to Counsel that it was unlikely that CPT would agree to facts in relation to the AER’s claim unless that course had been sanctioned by CSE. The respondents submit that those comments would indicate to a fair-minded lay observer that I regard CSE and CEPL as bound by the admitted facts in the AER proceedings, such that I might resolve the question of their liability by reference to those facts.

142    It must be borne in mind that the impugned comments were made in the context of attempting to ascertain the “real” facts in issue, something which is part of the judicial function, and particularly so in times of limited and diminishing court resources: see Federal Court of Australia Act 1976 (Cth) ss 37M, 37N; Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175. At the time of the case management hearing, CSE had already indicated its intention to make the present application and had written a letter setting out its foundation. That foundation was said to include the Penalty Judgment, which I determined on the basis of what I understood to be a bona fide agreement between the parties to that litigation as to the relevant facts. Whilst the parties are entitled to agree upon facts in proceedings, if it transpires that the facts so agreed are not true, a court may understandably be reluctant in future proceedings to act upon statements of agreed facts made pursuant to s 191 of the Evidence Act. At the case management hearing, I was confronted with the proposition that CPT, a partly owned subsidiary of CEPL, had agreed to a precise statement of facts which identified the causes of the C4 Incident, and upon which I had acted to impose a substantial penalty, yet one of its parent companies appeared to dispute those facts. In such circumstances, it was appropriate to enquire as to the position being taken with respect to Dr Brady’s report. Rather than suggesting any predetermination of any matter, an appropriately informed fair-minded lay observer might have cause for concern if a judge did not enquire into those apparently inconsistent positions. That is particularly so in circumstances where, at least on the face of the statement of claim, CSE may have commissioned Dr Brady’s report.

143    Despite all of that, the respondents submit that a fair-minded observer would not appreciate the context in which the impugned comments were made. They submit that the fair-minded observer might misconstrue the comments as indicating that I would feel bound to act upon the agreed facts which formed the basis of the Penalty Judgment, notwithstanding that those facts are apparently now in dispute. However, the fair-minded lay observer is taken to be reasonably informed of the context in which the comments were made. That context included the apparent inconsistency between the agreed facts upon which the Penalty Judgment proceeded and the position foreshadowed in the present proceedings. Properly informed of those circumstances, the observer would understand the comments as an attempt to identify the matters genuinely in dispute, rather than as an indication that the Court regarded CSE or CEPL as bound by the agreed facts. The comments, therefore, do not support the apprehension alleged.

Assessment of the factors relied upon

144    Against the background of the matters outlined in the previous section, the respondents’ case as to apprehended bias is advanced on two bases. The first is that my familiarity with Dr Brady’s report, which substantially overlapped with the facts upon which I imposed a substantial penalty upon CPT, might lead a fair-minded lay observer to apprehend that I might not bring an impartial and unprejudiced mind to determining responsibility for the C4 Incident. The second is that a cumulative view of the comments and observations considered throughout these reasons might lead the fair-minded lay observer to the same view. In the unusual circumstances of this case, the first submission should be accepted. Conversely, the second submission should be rejected. The comments and observations relied upon, properly understood in their respective contexts, do not individually, cumulatively, or in any combination, support the apprehension alleged.

The impact of the reception of extraneous material and reliance upon it

145    Despite the criticisms of the respondents’ submissions articulated in the foregoing paragraphs, it is undoubted that, in managing the several proceedings related to the C4 Incident, I have become closely familiar with the report of Dr Brady and his findings. I also closely considered the findings of that report to the extent they were adopted, as I perceived them to be, in the statement of agreed facts in the AER proceedings, upon which I acted to impose a substantial penalty of $9 million. In the present proceedings, it also appears that the statement of claim is based upon the findings in Dr Brady’s report. However, as the respondents have forcefully indicated, the contest as to liability will involve an assessment of the veracity of those findings.

146    Assuming that to be the case, given the extent of my previous consideration of Dr Brady’s report and my subsequent acceptance of and reliance upon agreed facts which substantially overlapped with its findings, it is probable, albeit only just, that the Ebner test is satisfied. The observer might reasonably apprehend that my previous engagement with and consideration of the report and its findings might consciously or subconsciously influence my assessment of the evidence concerning the cause of the C4 Incident and the responsibility for it. That is particularly so if the respondents object to the report and it is ultimately held to be inadmissible.

147    Of course, that is not to suggest that the agreed facts in the AER proceedings were or are binding upon anyone other than the parties to that litigation: Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd (No 2) (2002) 190 ALR 169, 183 – 184 [51]; Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 3) (2005) 215 ALR 301, 323 [116] – [118]. I also accept that there are cases in which a judge will be able to continue to hear a related matter after making a decision on the basis of agreed facts: see, for example, ACCC v SIP or ACCC v Turi Foods. However, it should be recalled that cases of this nature can turn on matters of degree: see Centro Properties (No 2), discussed at supra [50]. In this case, I had already become aware of the content of Dr Brady’s report from other sources, such as Sev.en’s application to remove the GPAs, prior to the AER proceedings. From this, I was able to perceive that the agreed facts were based largely upon findings in Dr Brady’s report and, therefore, had a greater, albeit imperfect, understanding of the issues than could have been obtained from the statement of agreed facts alone.

148    Moreover, the AER proceedings involved a detailed consideration of the cause of the C4 Incident, as recorded in the statement of agreed facts, following which I decided to impose a substantial penalty under a law of the Commonwealth. The materiality of those facts to the exercise of judicial power should not be underestimated. That being so, the circumstances are materially different from the mere receipt of potentially prejudicial material for the purpose of determining its admissibility, following which the judge is required to put that material aside.

149    The influence of such matters is exacerbated given the additional context that several related proceedings have been allocated to my docket in which, to a greater or lesser degree, the occurrence of the C4 Incident and the entity or entities responsible for it have been the subject of consideration or discussion.

150    Therefore, in the unusual circumstances of this case, a fair-minded lay observer might reach the state of mind identified by the Ebner test. The epicentre of the several matters which I have decided, or in which I have been involved, has been the occurrence of the C4 Incident and the subsequent investigation into its causes. In that regard, Dr Brady’s report has repeatedly resurfaced as a relevant matter. The fair-minded lay observer might question my ability to subsequently assess the veracity of those findings on their merits.

151    For those reasons, it is appropriate that this action be referred to the National Operations Registry for reallocation.

The expression of tentative views

152    The above is sufficient for the purposes of determining this application. However, something should be said of the respondents’ other submission, to the effect that the Ebner test could be satisfied by several general statements made in the course of the previous proceedings which, when read collectively, suggest a prima facie likelihood that CSE was responsible for the C4 Incident. That submission was not advanced with respect to any particular statement, and it was expressly stated that none was individually sufficient to reach the requisite standard. However, it was said that a combination of all the singularly benign statements was sufficient.

153    It is evident from the matters discussed above that many of the statements relied upon do not support the apprehension alleged when considered in their proper contexts. That is particularly so in respect of those statements which were expressly qualified by an insistence that no final determination was being made. It is difficult to understand the suggestion advanced by the respondents that these benign statements might be collectively transmogrified into support for an inference that the judicial mind is closed to persuasion. Some special or exceptional turn of events would be required for that to occur, and none was suggested.

154    As has been set out above, the observations concerning CSE’s potential responsibility for the C4 Incident were tentative and heavily qualified. References to a prima facie view necessarily indicated that no final view was being expressed. In several instances, the reasons went further by stating expressly that CSE “may” or “might” have breached its obligations, that responsibility was far from certain, or that CSE may have conclusive defences to any claim.

155    Broadly, the respondents’ approach on this application tended to isolate particular statements from the qualifications which accompanied them so as to accord them an adverse inference. That is an inappropriate way in which to pursue an application of this nature. If a statement is to be advanced as allegedly impacting upon a judicial officer’s impartiality or as creating an apprehension to that effect, it ought to be identified with forensic honesty as to its true meaning.

Conclusion

156    For the foregoing reasons, in the circumstances of this case, the Ebner test is satisfied and the appropriate order is that the matter be referred to the National Operations Registry for allocation to a different judge.

157    Given that the issue which arose was not the fault of either party, it is appropriate that there be no order as to the costs of the application.

Associate:    

Dated:    6 November 2026