Australian Security Academy Pty Ltd v Australasian Institute of Chartered Loss Adjusters [2025] FCA 326

1. By interlocutory application dated 31 March 2025, the applicant seeks orders:

(a) that, as the docket judge, I disqualify myself from the further hearing and determination of the proceeding on the basis of a reasonable apprehension of bias;

(b) alternatively, that the hearing of liability and the quantum of damages in this proceeding be split pursuant to rule 30.01(1) of the Federal Court Rules 2011 (Cth);

(c) that the requirements of rule 30.01(2) of the Rules be dispensed with pursuant to rule 1.32 of the Rules as it is in the interests of justice to do so; and

(d) for costs in the application.

1. The applicant relies upon the affidavit of Michael Evans, sworn on 31 March 2025. That affidavit exhibits the transcript of the case management hearing in this proceeding before me on 28 February 2025. The applicant submits that comments made by me at the hearing on 28 February 2025 give rise to a reasonable apprehension of bias against the applicant.
2. The applicant relies upon the oral submissions made by Mr Levine of counsel, together with written submissions filed on 1 April 2025.
3. The applicant identifies the following comments of mine at the hearing on 28 February 2025 upon which it places reliance:

(a) "I'm not permitting you to do that" (T4.20-25).

(b) "The resources of this court are valuable. You don't just get to bring any proceeding as trivial as this" (T4.35-40).

(c) "No, it is trivial" (T4.41).

(d) "You now want to go out shopping for another expert" (T6.1-2).

(e) "This is a classic case of witless shopping" (T6.6).

(f) "I'm not going to permit you to have the leave to shop around and file another expert" (T6.32-35).

(g) "I'm not going to permit you to do that. I'm not satisfied that it's appropriate at this late juncture" (T7.15-20).

(h) "There's no evidence of loss or damage" (T7.25-30).

(i) "This is just nonsense, Mr Levine" (T9.25-30).

(j) "Just shop around until we get the result we want?" (T10.5-10).

1. The applicant submits that my comments were dismissive and were that:

(a) the applicant was acting improperly and was engaging in witness shopping to find some evidence of loss and damage; and

(b) there was no evidence of loss or damage.

The applicant claims that these were issues that impacted upon the credibility of the applicant's director (who would be testifying at the trial) and findings as to the quantum of loss or damage which is a live issue in the trial.

1. The applicant submits that my comments were needlessly colourful, emphatic, pejorative and were dismissive of the case as being a waste of time and trivial.
2. The applicant submits that my comments could give rise to a reasonable apprehension that the matters raised at the case management hearing by the applicant had been refused without proper consideration and prior to the completion of submissions.
3. The respondent opposes the orders sought by the applicant's interlocutory application and relies upon the oral submissions of Ms Hickey of counsel, together with written submissions filed on 2 April 2025.

1. In order to properly contextualise the comments made at the case management hearing, it is necessary to provide the relevant background to the hearing.
2. This proceeding was commenced on 12 March 2021 and, on 30 July 2024, was listed for trial on 7 April 2025 on an estimate of 3 days. This matter has progressed largely on the papers and primarily by consent, save for an interlocutory application heard by a registrar on 3 March 2023. The case management hearing on 28 February 2025 was the first time the proceeding came before me as the docket judge.
3. The proceeding itself relates to an email sent by the second respondent, Mr Tony Libke, as Chief Executive of the first respondent, AICLA, which is the peak body for loss adjusters in Australia. The email was sent on 30 June 2020 to a past graduate of the applicant, Mr Daniel Brennan, and related to Mr Brennan's application for membership to AICLA. The email was also copied to a second person, Mr David Cambridge. The key part of the email which the proceeding relates to is as follows:

AICLA admittance requirements as outlined in the application form states that studies be completed in the ANZIIF Diploma of Loss Adjusting. I note that your studies are in a non-accredited Diploma course.

1. The applicant brings a claim for defamation, misleading and deceptive conduct, and injurious falsehood in relation to the email.
2. The matter which arose for determination at the case management hearing was whether leave would be granted to the applicant to adduce fresh expert evidence on the quantum of the applicant's loss or damage.
3. The parties have filed expert accounting evidence on the question of quantum. The applicant's expert accounting witness was Mr William O'Shea, while the respondent's expert is Ms Melinda Bowman. Two joint expert reports were filed. In the first joint expert report, the experts effectively agreed that the relevant loss and damage suffered by the applicant from the email could not be assessed on the information and assumptions provided. In the second joint expert report, the experts both agreed that they had not been provided with any documentation which supported a view that the applicant suffered any loss and damage resulting from the email.
4. In summary, the basis on which the applicant sought leave to file fresh expert evidence was that Ms Bowman had completed a course at the applicant in 2016. The applicant argued that Ms Bowman's failure to disclose her previous relationship with the applicant raised concerns about her credibility and impacted her independence. The applicant then further argued that as Ms Bowman and Mr O'Shea participated in expert conclaves, that the applicant should be granted leave to file fresh expert evidence to correct any undue influence imposed on Mr O'Shea.

1. The principles relevant to bias may be shortly stated.
2. In Ebner v Official Trustee in Bankruptcy [2000] HCA 63; 205 CLR 337, Gleeson CJ, McHugh, Gummow and Hayne JJ explained the fundamental principle that the common law system of adversarial trial requires the trial to be conducted by an independent and impartial tribunal. That principle will be infringed in a case of actual bias: Ebner at [3]-[5]. The applicant has not suggested actual bias.
3. A judge may also be disqualified from hearing or determining a case where a reasonable apprehension of bias exists. 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 that the judge is required to decide: Ebner at [6]. It should be noted that the observer is taken to be reasonable and that the person observed is "a professional judge whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial": see Johnson v Johnson [2000] HCA 48; 201 CLR 488 at [12] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ) citing Vakauta v Kelly (1988) 13 NSWLR 502 at 527 (McHugh JA) as adopted in Vakauta v Kelly [1989] HCA 44; 167 CLR 568 at 584-585 (Toohey J).
4. The apprehension of bias principle is justified by the fundamental principle that a trial is to be conducted by an independent and impartial tribunal. That principle is so important that even the appearance of departure from it is prohibited in order to prevent the undermining of the integrity of the judicial system: see Ebner at [7].
5. The application of the apprehension of bias test requires two steps:

(a) first, there must be identification of the matters that raise the relevant apprehension that a decision-maker might decide a case other than on its legal and factual merits; and

(b) second, there must be an articulation of the logical connection between, on one hand, those matters and, on the other hand, the feared deviation from the course of deciding the case on its merits.

See Ebner at [8]; British American Tobacco Australia Services Ltd v Laurie [2011] HCA 2; 242 CLR 283 at [32]- [48] (French CJ); Isbester v Knox City Council [2015] HCA 20; 255 CLR 135 at [21] (Kiefel, Bell, Keane and Nettle JJ); MZAOL v Minister for Immigration and Border Protection [2019] FCAFC 68 at [82]- [83] (Bromberg, Farrell and Davies JJ).

1. A conclusion of apprehended bias is not to be reached lightly: Ebner at [19]-[20].
2. The mere fact that a judge has made findings of fact or law adverse to a party in a previous decision does not give rise to a reasonable apprehension of bias: Ogbonna v CTI Logistics Ltd [2022] FCA 227 at [23] (Jackson J); Quach v Marks (No 2) [2021] FCA 922 at [15] (Abraham J).

1. For the reasons that follow, I refuse to recuse myself from the further hearing and determination of this proceeding on the basis of a reasonable apprehension of bias.
2. My comments, that are identified by the applicant and reproduced above, are taken without context and do not reflect the substance of the discussion which took place between counsel for the applicant, Mr Levine, and myself. The transcript should not be selectively dissected as the applicant has sought to do on this application. It should be read as a whole and in context.
3. The application was an interlocutory hearing dealing with case management issues. The application to lead fresh expert evidence was a question of case management involving the exercise of judicial discretion arising under r 5.04 of the Rules.
4. Generally, interlocutory rulings ought not be regarded as giving rise to a reasonable apprehension of bias or actual bias, as they necessarily precede the final resolution of the proceedings and therefore do not finally determine any of the issues. The fact that the application did not determine any issue to be decided at trial is relevant to the context in which my comments must be understood: Sayed v National Disability Insurance Agency (No 2) [2022] FCA 1591 at [69] (O'Bryan J).
5. It is also relevant that the interlocutory application did not require me to make any adverse credit findings or assess evidence challenged by cross-examination to determine a contested issue: Sayed at [70]; Westpac Banking Corporation v Forum Finance Pty Ltd (Apprehended Bias Application) [2022] FCA 981 at [12] (Lee J).
6. The observation that the proceeding was trivial must be understood in the context of the proceeding holistically.

(a) Firstly, considering the substance of the matter. On its face, the case put is about a single email (or extract of it), the text of which appears benign, addressed to only two people, and appears trivial in nature. It is, on its face, difficult to understand how the extract of the email conveyed the defamatory imputations that the respondent alleges. Additionally, the email was sent to only two people, being Mr Brennan, who applied for membership to AICLA, and Mr Cambridge, who is the Managing Director of Technical Assessing, being the employer of Mr Brennan. There is no pleading that the email was read by anyone other than Mr Brennan and Mr Cambridge.

(b) Secondly, as noted above, the parties both filed expert accounting evidence on the question of quantum. Mr O'Shea and Ms Bowman both filed expert reports and then conferred in an expert conclave and filed the first joint report, dated 2 July 2024, and then a second joint report dated 5 December 2024. In the second joint report, both experts expressed the opinion that there was no evidence of loss and damage.

(c) Thirdly, the matter was commenced over four years ago, albeit during that time it has progressed largely on the papers and by consent. The matter was set down for trial on an estimate of three days, with the parties seemingly having been unable to narrow any of the substantive issues in dispute despite the subject matter of the proceeding. In this context, it is appropriate to compare the subject matter of the proceeding to the finite resources of the court that will be devoted to the trial. Considering the proportionality of a claim having regard to the court's competing demands is an appropriate function of active case management, and in pursuing the overarching purpose of the civil practice and procedure provisions under s 37M of the Federal Court Act 1976 (Cth).

(d) Fourthly, the matter for determination at the case management hearing, namely, whether it was appropriate to exercise my judicial discretion to grant the applicant leave to adduce fresh expert evidence, was appropriate to exercise by considering, on its face, the merits of the applicant's case.

1. A conclusion of apprehended bias is not to be reached lightly: Ebner at [19]-[20]. I do not accept that a fair-minded lay observer might reasonably apprehend that my observations on the triviality of the proceeding, in the context of the proceeding, would mean that I might not bring an impartial mind to the resolution of the questions that I am ultimately required to decide at trial. This is particularly the case in circumstances where I, as a docket judge, were probing counsel as to the case which they were advancing at trial for the purposes of determining the applicant's application for leave to adduce fresh expert evidence on loss and damage. Indeed, my observations as to the triviality of the proceeding followed from an initial discussion with Mr Levine where I sought to test the propositions central to the applicant's defamation case.
2. It is permissible for a judge on an application, to test counsel on the case which they advance on behalf of their client. It is also permissible for a judge to identify perceived weaknesses in a party's case. That does not manifest itself in a reasonable apprehension of bias that the judge might not bring an impartial mind to the resolution of the question that the judge is required to decide.
3. I also reject the applicant's submission that the findings which I made impacted upon the credibility of the applicant's director.
4. The relevant finding which I ultimately made was as follows:

In respect to the application which is made to me today that the applicant be permitted to file fresh expert evidence going to loss and damage, that application is refused. The reason I'm refusing that application is that this hearing is set down for 7 April this year. It has been in the court list since 12 March 2021. The reason for the applicant making an application to file fresh expert evidence is not satisfactory. It appears to be because the experts, Mr O'Shea on behalf of the applicant and Ms Bo[w]man on behalf of the respondent, have each filed expert reports and then they have filed a joint expert report dated 2 July 2024 and then a further second expert joint report on 5 December 2024. And the most recent report indicates and states that the opinion of the experts, that there is no evidence of loss and damage.

The applicant now in the face of that seeks to get leave to file fresh expert evidence from another expert at a different accounting firm. That is in circumstances where there's no additional discovery that has been identified, there's no additional evidence that has been identified. So I take the view that the application is being made to shop around for another expert to try and find some evidence of loss and damage in circumstances where the documentation has not changed, the evidence has not changed. It is a classic example of witness shopping, which the court will not permit. So for those reasons I will not grant leave to the applicant to file any additional expert evidence.

The trial will proceed on 7 April 2025. Insofar as the applicant has raised an issue of the independence of the expert, Melinda Bo[w]man, that is relied upon by the respondent, any application going to the admissibility of Ms Bo[w]man's expert opinion will be dealt with in the usual way at trial.

1. Those findings are in no way connected to the credibility of the applicant's director and shareholder, Michael Evans. I have also not made an actual finding that there is no loss or damage, which is a matter for determination at the trial. My observations on loss and damage related to the expert opinion contained in the second joint expert report, as providing the basis for the applicant to seek leave to adduce fresh expert evidence.
2. I also reject the applicant's submission that the findings as to the applicant witness shopping were objectionable and was unnecessarily pejorative. That finding was germane to the ruling which I made and was reached as the applicant had provided no satisfactory reason as to why leave should be granted. The finding was necessarily definitive to refuse the filing of fresh expert evidence.
3. For these reasons the application to disqualify myself from the further hearing and determination of this proceeding is rejected.

1. The applicant also applies for an order that the question of liability and damages be split, and that there be dispensation from the requirement that an application for a split trial be made before the proceeding is fixed for trial, as it is in the interests of justice to do so.
2. I am not satisfied that the applicant has advanced any sufficient basis as to why, on the morning of the trial commencing, the proceeding having been commenced on 12 March 2021 and having been listed for trial over eight months ago, it is just and convenient to split liability from quantum.
3. The starting point is that all issues of fact and law should be determined at the one hearing. In Tepko Pty Ltd v Water Board [2001] HCA 19; (2001) 206 CLR 1, Kirby and Callinan JJ commented at 55:

(a) The attractions of trials of issues, rather than of cases in their totality, are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have needed to make full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap; (b) A party whose whole case is knocked out on a trial of a preliminary or single issue may suspect, however unjustifiably, that an abbreviated course was adopted and a decision reached in the court's (rather than the parties') interests; (c) There is an additional potential for further appeals, to which the course of the trial on separate issues may give rise; and (d) Single-issue trials should only be embarked upon when their utility, economy and fairness to the parties are beyond question.

1. The requirement in r 30.01(2), for an application for separate trials to be made before a date is fixed for trial, is designed to ensure that applications for the hearing of separate questions are made promptly and before significant resources are expended on the preparation for trial on all issues.
2. The matter has progressed to date on the basis that the trial would commence on all issues, and presumably, the parties have gone to some cost and effort to ensure that they are prepared to deal with all issues at the trial. I am not satisfied that, at this late stage of the proceeding, it can be considered just and convenient to split the trial. Doing so, at this stage, would undermine the overarching purpose of facilitating the just resolution of the proceeding as quickly, inexpensively and efficiently as possible. Rather, it risks creating delays and inefficiencies.
3. There having been no satisfactory reason advanced as to why it is in the interests of justice to split liability from quantum, and no explanation as to why such application is brought on the morning of the first day of the trial, I reject the application.

1. The applicant's interlocutory application will be dismissed. Costs will follow the event.

I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Anderson.