Plaintiff v Defendant

2 On 12 and 13 November 2019 I heard a number of preliminary questions relating to whether there had been effective service of three creditor's statutory demands, and whether certain technical defects with respect to the originating process seeking orders to wind up Kornucopia resulted in its invalidity.

3 On 19 November 2019, I published reasons for my decision (Reasons), where I found:[3]

(a) service by post of the three statutory demands had been effective on the Companies; and that the Companies had failed to rebut the presumption of service arising pursuant to s 29(1) of the Acts Interpretation Act 1901 (Cth);

(b) in the case of Efektiv and AGV, there had also been informal service by email of the statutory demands to a director or officer of the relevant company; and

(c) in the case of Kornucopia, I was obliged not to dismiss the originating process, by virtue of s 467A of the Corporations Act 2001 (Cth) (the Act), because of the defects in connection with the application.

4 The trial of the winding up applications is set down for hearing on an estimate of five days, to commence on 11 December 2019.[4]

5 On 2 December 2019, the Companies filed an application seeking my recusal for apprehended bias. The basis of the application relates to and arises out of:

(a) certain independent investigations undertaken by the Court, consisting of an 'Austlii' search into reported decisions in which the Companies (or the directors or related parties) are parties, and inquiries with Registry staff of this Court, the Victorian Civil and Administrative Tribunal (VCAT) and other courts in Victoria, as to volume of litigation to which these entities are parties (the Searches);

(b) certain statements made in the Reasons, regardless of whether they were derived from information ascertained by the Searches; and

(c) certain statements made at a directions hearing on 24 October 2019.

6 Given the urgency of the matter (the trial was due to commence on 11 December 2019) the applications were heard on 3 December 2019. On 5 December 2019, I dismissed the application in each matter. I indicated that reasons would be delivered on 9 December 2019. These are the reasons.[5]

7 The suggested passages of the Reasons which have given rise to this application are set out below.

The Companies (and other related parties) are engaged in substantial litigation in multiple jurisdictions within Victoria. The Companies are, it appears, engaged in the business of leasing apartments from landlords, like Jeffrey Chen, and then subletting or licensing those apartments to others. Like Jeffrey Chen, many landlords have not been paid and have commenced proceedings in VCAT. In evidence, officers of the Companies estimated that the Companies were engaged in approximately fifty different matters in VCAT (which have led to various judicial review applications and appeals in this Court) in which rental arrears and/or possession orders are sought. (emphasis added)

9 In a footnote to the sentence, '[t]he Companies (and other related parties) are engaged in substantial litigation in multiple jurisdictions within Victoria', I said:[7]

As at 4 November 2019, there were 185 proceedings which had been commenced and finalised in VCAT in 2019. As at 15 November 2019, there are a further 12 matters in VCAT which have been commenced and remain active. As of late September 2019, there were 19 proceedings which had been commenced and finalised in the Supreme Court in 2019. There are a further 19 proceedings which have been commenced and remain active, including the 3 proceedings which are presently before me. As at 14 November 2019, there is 1 proceeding which has been commenced and remains active in the County Court. As at 15 November 2019, there are 15 proceedings (most of which are registrations of VCAT orders) which have been commenced and remain active in the Magistrate's Court. These are proceedings in which one or various of the respective Companies before me, or in some cases, their directors, are parties (either as plaintiff/applicant or defendant/respondent).

10 While writing the Reasons, I instructed my Senior Associate to enquire with the VCAT, Magistrate's Court, County Court and Supreme Court of Victoria, to ascertain the volume of litigation which the Companies are engaged in. That footnote was the result of those enquiries and is relied upon by the Companies as part of the basis for this apprehended bias application.

11 In the next paragraph of the Reasons, I referred to a potential offsetting claim which Kornucopia maintained against Chen,[8] in the following terms:[9]

Putting to one side the various technical matters raised by the Companies, in these applications, matters largely associated with the statutory demand procedure, the main complaint of Kornucopia (in the case of Chen and others) is that they were denied the right of a tenant to quiet enjoyment, which, it was submitted has given rise to a potential offsetting claim. It is not suggested that Chen (or other landlords) denied them such a right, but rather that the relevant Owners Corporation had. The basis of that claim is racist abuse (or similar conduct) by some of the Owners Corporation, which has been the springboard for other litigation. It is not apparent and has not been explained what this has to do with Chen, and indeed what the loss is, especially if Kornucopia's subtenants have continued paying rental to the company. This potential offsetting claim was not made within the 21 day period within which Kornucopia could have applied to set aside the statutory demand. Whether it can now be made is an issue to be determined after a number of technical and preliminary matters are first dealt with. (emphasis added)

12 In a footnote to the sentence ending, 'which has been the springboard for other litigation', I said:[10]

See reported decisions from 2019 in: Kornucopia Pty Ltd v Tse [2019] VSC 442; Kornucopia Pty Ltd v Zhang [2019] VSC 439; Kornucopia Pty Ltd v Zhu [2019] VSC 440; Kornucopia Pty Ltd v Li [2019] VSC 441; _Kornucopia Pty Ltd v Won_g [2019] VSC 443; Tse v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 537; Effendy & Anggrek v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 1146; Wong v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 915; Hwang v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 1436; Wirawan v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 1437; Ye v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 824; Effendy v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 1435; Ho v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 917; Wei v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 878; Li v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 877; Li v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 697; Wong v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 648; Home Sweet Home Investments Pty Ltd v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 1438; Wang v Efektiv Pty Ltd (Residential Tenancies) [2019] VCAT 1369; Tam v The State Of Our Times Pty Ltd (No. 2) (Residential Tenancies) [2019] VCAT 1167; Tam v The State Of Our Times Pty Ltd (Residential Tenancies) [2019] VCAT 1037; Nguyen v Efektiv Pty Ltd (Residential Tenancies) [2019] VCAT 1680; Efektiv Pty Ltd v Hodge [2019] VSC 636; Efektiv Pty Ltd v Jescal Nominees [2019] VSC 628; Wang v Efektiv Pty Ltd (Residential Tenancies) [2019] VCAT 1369; Nguyen v Efektiv Pty Ltd (Residential Tenancies) [2019] VCAT 1680; 278 Kingsway Gpg Pty Ltd v Efektiv Pty Ltd (Costs) (Residential Tenancies) [2019] VCAT 1707; Ye v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 824; Hwang v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 1436; Tse v Kornucopia Pty Ltd (Residential Tenancies) [2019] VCAT 537. In many cases the validity of service was an issue.

13 The citations for these reported decisions of the Supreme Court and VCAT were obtained by way of an 'Austlii' search, using the search terms 'Kornucopia' and 'Efektiv'. I did not enquire further into the nature of those decisions, the facts which were in issue, the evidence given, or the findings ultimately made.

14 The following passages contained footnotes which cross-referenced the footnotes (the result of the Searches) referred to above:

(a) At paragraph [67]: 'Given the nature of the business, the volume of activity and the numerous legal proceedings on foot to which the Companies are parties, it is not unreasonable and is more probable that following delivery, the Demands were simply mislaid.' (the First Statement)

(b) At paragraph [148]: 'The Companies are involved in substantial litigation in VCAT and in this Court and are entirely familiar with the relevant procedures.'[11] (the Second Statement)

15 Further, there are two comments referred to in the footnotes to the Reasons which the Companies rely upon in this application:

(a) Within footnote 2, after referring to Lulu Xu (Xu) and David Youl's (Youl)[12] evidence of the fifty proceedings in VCAT, I said: 'The number is much higher.' (the Third Statement)

(b) Within footnote 3, quoted above, I said: 'In many cases the validity of service was an issue.' (the Fourth Statement) (together, the Statements)

16 The Companies contend that the matters, the subject of the Searches, were used to dispose of certain aspects of the their case, without any opportunity to verify or dispute the information, or to respond to that information by evidence or submissions placing it in its proper context, and for this reason I should not continue to hear the winding up applications or have any further engagement in this proceeding, save for this application which of course I am obliged to decide, notwithstanding its nature. In particular, the Companies contend that by the Searches, I undertook 'an independent concerted effort to discover facts about the Companies', relating to the extent or volume of litigation and the offsetting claim, matters that it is suggested 'had not been submitted into evidence' and was designed to or had an effect on 'the credibility of their evidence.' The Companies 'refute the veracity of' my statements in relation to these matters and complain that they were precluded from 'the opportunity ... to refute, correct or otherwise contextualise the data.'

17 The Searches, and the associated Statements, were contended by the Companies to be the basis of findings made in the Reasons, in respect of which they said there is no evidence. Particularly, the Companies submit that there was no evidence that there are 'many landlords [which] have not been paid and have commenced proceedings in VCAT' and further, that I had 'dismissed' Kornucopia's offsetting claim, prior to its hearing.[13]

18 In addition to the Searches, the Companies submit that various comments made by me at a directions hearing on 24 October 2019 give rise to an apprehension of bias. In particular, it is submitted:

[14] In his published reasons and during the hearing of 24 October 2019, Justice Sifris made references to the introduction of other grounds of insolvency, in addition to the ones that the applications of the Plaintiffs had relied upon.

[15] Finally, during the hearing of 24 October 2019, Justice Sifris made a number of prejudicial remarks about The Companies and their beneficial owner, in addition to plainly dismissing their claims against the landlords (including Mr Jeffrey Chen and two supporting creditors) as "extravagant".

19 In summary, the basis for the application comprises Statements in the Reasons, whether or not derived from the Searches, and statements or comments made at the directions hearing of 24 October 2019.

20 The relevant Statements in the Reasons, are as noted, as follows:

(a) Paragraph 6, footnote 1 (and paragraph [67]): 'Substantial litigation'.

(b) Paragraph 6, footnote 2: 'The number is much higher.'

(c) Paragraph 7, footnote 3 (and paragraph [143]): the offsetting claim 'has been a springboard for other litigation'.

(d) Paragraph 7, footnote 3: 'In many cases the validity of service was an issue.'

(e) Paragraph 6: 'many landlords have not been paid'.

(f) Paragraph 7: The suggested offsetting claim - denial of quiet enjoyment and racist abuse.

Paragraphs (a) to (d) are appropriately dealt with by reference to the Statements under the heading 'The Searches and the Statements'. Paragraphs (e) and (f) are dealt with under the heading, 'The offsetting claim'.

21 The statements or comments at the directions hearing on 24 October 2019 are as follows:

(a) The extravagance of the offsetting claim referred to in (f) above.

(b) The suggestion or enquiry with Senior Counsel as to whether other grounds of insolvency may be relied on.

22 Having regard to the basis upon which the application is made, it is convenient after setting out the applicable legal principles to deal with the issues as follows:

(a) The Searches and the Statements.

(b) The offsetting claim.

(c) Other grounds of insolvency.

(d) Procedural fairness.

23 In Doughty-Cowell v Kyriazis, the Court of Appeal summarised the applicable principles:[14]

The bias rule is breached 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. The level of knowledge and sophistication which a fair-minded observer hypothetically brings to the question is that of a lay person (not a lawyer), informed as to the relevant facts of the case and sufficiently knowledgeable and informed to be capable of bringing a rational and reasonable assessment to bear.

As was said by Kirby J in Johnson v Johnson:

[A fair-minded observer] would be taken to know commonplace things, such as the fact that adjudicators sometimes say, or do, things that they might later wish they had not, without necessarily disqualifying themselves from continuing to exercise their powers. [The observer] must also now be taken to have, at least in a very general way, some knowledge of the fact that an adjudicator may properly adopt reasonable efforts to confine proceedings within appropriate limits and to ensure that time is not wasted. [The observer] will also be aware of the strong professional pressures on adjudicators (reinforced by the facilities of appeal and review) to uphold traditions of integrity and impartiality. Acting reasonably, [the observer] would not reach a hasty conclusion based on the appearance evoked by an isolated episode of temper or remarks to the parties or their representatives, which was taken out of context. Finally, a reasonable member of the public is neither complacent nor unduly sensitive or suspicious.

24 In Hamod v New South Wales (Hamod), the New South Wales Court of Appeal (Beazley JA, with Giles and Whealy JJA agreeing) said:[15]

1. The authorities emphasise that any "reasonable apprehension of bias" must be "firmly established" before it is appropriate for a judge to disqualify himself or herself from participating in the proceedings. The question of the hypothetical observer's reasonable apprehension falls to be decided against the standards of ordinary judicial practice: see Campomar Sociedad, Limitada v Nike International Ltd [2000] HCA 48; (2000) 201 CLR 488 at 493, 508; Ebner v Official Trustee in Bankruptcy [2000] HCA 63 ; (2000) 205 CLR 337 at 344, 365. The "reasonable apprehension" criterion means that neither an expectation about the way the judge is likely to decide the case, nor an express allegation of bias, is necessarily sufficient to generate a reasonable apprehension of partiality: Re JRL; Ex parte CJL [1986] HCA 39 ; (1986) 161 CLR 342 at 352.
2. It is a fundamental rule that every judicial tribunal must be, and be seen to be, impartial: Johnson (supra) at 501. Even in the absence of direct personal interest, a judge ought not to hear a case if a fair minded lay observer might reasonably apprehend an impartial judicial mind might not be brought to bear on the resolution of the proceedings: see, for example, Vakauta v Kelly [1989] HCA 44 ; (1989) 167 CLR 568. The reference to the fair minded observer has been described as in reality "no more than a personification of an objective test": see Jae Kyung Lee v Bob Chae-Sang Cha [2008] NSWCA 13 at par [43] per Basten JA.
3. In deciding the question of "reasonable apprehension" it is important that judicial officers discharge their duty to sit, and do not accede too readily to suggestions of the appearance of bias. The issue in each case is whether the judge appointed to hear the matter might not bring an impartial and unprejudiced mind to its resolution: Aussie Airlines Pty Ltd v Australian Airlines Pty Ltd [1996] FCA 1308 ; (1996) 65 FCR 215 at 230. A necessary corollary of this criterion is that a judge ought not to disqualify himself or herself except for proper reason: Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd (1986) 6 NSWLR 272. The criterion of "reasonable apprehension" should not be subverted into a lesser enquiry as to whether it would be "better" for another judge to hear the case. Applying such an imprecise and impressionistic criterion could encourage a belief that a party can, by making disqualification applications, obtain a hearing before a judge thought to be more favourable: see Re JRL (supra) at 352.
4. The limitation of reasonableness is particularly important in deciding whether a judge's interlocutory rulings, or preliminary views of the likely outcome, indicate bias - irrespective of whether they are expressed at an early or late stage of the proceedings. Such interlocutory rulings or expressions ought not to be regarded as giving rise to a reasonable apprehension of bias unless they indicate a significant level of prejudgment in relation to matters relevant to the final resolution of the proceedings: Laws v Australian Broadcasting Tribunal [1990] HCA 31 ; (1990) 170 CLR 70 at 100. Generally speaking, because of the nature of the issues and the limited factual investigation that interlocutory proceedings involve, rulings on interlocutory matters are unlikely to justify a reasonable apprehension of bias: Idoport Pty Ltd v National Australia Bank Ltd [2004] NSWSC 270. See also Sir Anthony Mason, "Judicial disqualification for bias or apprehended bias and the problem of appellate review", Constitutional Law & Policy Review, Vol 1, #2 12 August 1998 at 21.

To these statements I would only add the following. In dealing with an application for apprehended bias, the fair minded lay observer is taken to know of all the relevant circumstances: Vakauta v Kelly (1988) 13 NSWLR 502 at 528 and 535-6 (this aspect of the Court of Appeal's decision was not commented upon in the High Court's reversal of its decision). This statement finds confirmation in relatively recent times in the High Court. In Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd Callinan J, at [177] 635, observed that the notional lay person should not be taken to be completely unaware of the way in which cases are brought to trial and tried. Callinan J also considered it appropriate, when determining whether there was apprehended bias, to have regard to the transcript and reasons for judgment to see whether the cumulative effect was one of bias, or alternatively, whether any statement which may have caused concern was later corrected or modified so as to remove the perception of bias. See also Johnson v Johnson [2000] HCA 48 ; 201 CLR 488 at [11]-[14]. (emphasis added)

25 In Re JRL; Ex parte CJL (Re JRL), Gibbs CJ said, in a situation where representations had been made in private by a court counsellor and prospective witness to a Judge:[16]

...when a judge has received in private representations concerning a case, the court will not inquire whether the representations in fact worked to the prejudice of the party against whose interest they were made - it is enough that they might do so: see Kanda v Government of Malaya at pp 337-8 ...

26 In Ebner v Official Trustee in Bankruptcy (Ebner), Gleeson CJ, McHugh, Gummow, Hayne JJ said:[17]

...The question is one of possibility (real and not remote), not probability. ...[I]f the matter has already been decided, the test is one which requires no conclusion about what factors actually influenced the outcome. No attempt need be made to inquire into the actual thought processes of the judge or juror. (emphasis in original)

27 The joint judgment in Ebner emphasises the word 'actual' to highlight that apprehended bias is determined objectively. It is not necessary to show that some material had been impermissibly considered by the Judge and that it had, in fact, influenced the decision, regardless of whether it is referred to or not in the reasons. Rather, the question is whether, with reference to the objectively ascertainable context, it was possible for that material to have influenced the decision (or a decision in future). This real and not remote 'possibility' is not merely the presence of a connection between some subject-matter ascertained from extraneous inquiries and a separate matter discussed or considered (whether relevant to material issues or simply context) in the reasons for a decision. That approach would, contrary to the authorities described below, give rise to an absolute or unqualified rule and require the Court to divorce the impugned conduct from the context and subsequent events, namely, the Reasons.[18] Rather, the Reasons form the objectively ascertainable context, against which the lay observer would assess the possibility of an apprehension of pre-determination.[19] The Reasons disclose the relationship of the extraneous information to the issues; the manner in which the Judge decided the issues; and they may have the effect, in the eyes of the lay observer, of negating the possibility of an apprehension of bias which may arise from some instance of impugned conduct.

28 In Bodycorp Repairers Pty Ltd v Maisano (Recusal Appln) (No 12) (Bodycorp), Riordan J restated a number of principles identified by the Court of Appeal in AJH Lawyers Pty Ltd v Careri.[20] Of these, I repeat the test which is applied in these applications:[21]

The test is applied in the following two steps:

(i) The identification of the conduct of the judge which is alleged to give rise to an apprehension of bias.

(ii) Articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits.

29 In Re JRL,[22] a Judge of the Family Court was hearing child custody proceedings. A report was prepared by the court counsellor which strongly favoured the wife. It warned that if the child remained with the father it would be detrimental to the child's mental health. During a luncheon adjournment, the court counsellor spoke to the Judge in private in her Chambers. The counsellor complained to the Judge of her intention to grant an adjournment of the custody application, volunteered information about her qualifications as a prospective expert witness, and discussed aspects of the proceedings before the Judge. The Judge thereafter called Counsel for the parties into her Chambers for further discussion, and a conversation substantially between the Judge and the counsellor followed. When the hearing resumed the father applied to have the Judge disqualify herself. The High Court, by majority, held that the Judge should have recused herself from hearing the remainder of the proceeding, as the actions of the counsellor and Judge gave rise to a reasonable apprehension that the Judge would not bring an impartial mind to the issue of custody. Mason J said:[23]

A central element in the system of justice administered by our courts is that it should be fair and this means that it must be open, impartial and even-handed. It is for this reason that one of the cardinal principles of the law is that a judge tries the case before him on the evidence and arguments presented to him in open court by the parties or their legal representatives and by reference to those matters alone, unless Parliament otherwise provides. It would be inconsistent with basic notions of fairness that a judge should take into account, or even receive, secret or private representations on behalf of a party or from a stranger with reference to a case which he has to decide.

30 In Le v Magistrate Barbara Lane (Le),[24] an accused was on trial for charges of permitting the use of a building as a dwelling house, where it was not originally erected for that purpose and for which he did not have the consent of the local government. The accused's defence was that he did not know that the buildings were being used as dwelling houses, and that the seasonal workers housed in such buildings were engaged by labour hire companies for whom the accused did not have responsibility. The accused was cross-examined on the labour hire companies which had been engaged. The magistrate posed a question: 'Are they Western Australian companies? Because I Googled them and I couldn't find them. I thought that would be useful.'[25] The question was promptly objected to, and an application for recusal made and then refused. On an application for review of the magistrate's refusal to have recused herself, EM Heenan J found that the search was capable of giving rise to a reasonable apprehension of bias. His Honour said:[26]

...the question was capable of implying, and in my respectful view did imply, a challenge to the credibility and/or reliability of the witness based on the extraneous enquiry which the learned magistrate had made rather than from any aspect of the evidence which, to that stage was before the court.

...her Honour had made independent enquiries to check the accuracy of earlier evidence given by the witness, [and] those enquiries provided grounds for doubting the credibility or reliability of the witness and ...these doubts were being entertained by the learned magistrate in herself challenging directly by this question the veracity of the witness.

...the submission itself discloses the feared deviation from the course of deciding the case on its merits, by identifying the feature of the case that the learned magistrate made independent enquiries of her own into factual issues in possible contention between the parties and put a proposition to one of the defendants in cross-examination reasonably capable of conveying the impression that her Honour did not accept the truth or reliability of evidence on that point which the witness had previously given.

...the problem is ... in that resort to external sources has been made by the judicial officer herself, without any prompting or invitation by the parties, in order for the learned judge, no doubt conscientiously, better to appreciate the accuracy of the evidence which had up to that point been given. It is difficult to avoid the conclusion that this represents the appearance of an independent, unstructured and unsupervised investigation of the facts by the judicial officer, the extent of which cannot be fully canvassed or examined and which is not subject to the usual protections concerning the admissibility of evidence, the right of cross-examination, nor the opportunity to adduce evidence or refute any implications or inferences which might arise from the enquiry.

31 EM Heenan J concluded and ordered a retrial before a different magistrate:[27]

...there is a danger that the decision may be based not on evidence received in the courtroom but on other material or the influence of that other material upon evidence which was received in the courtroom. That appears to be, with all respect, an insuperable risk and problem in the present circumstances and one which is not eradicated or allayed by the detailed subsequent explanations which her Honour gave.

32 In Casey v Gerace (Casey),[28] the appellant was convicted for having unlawfully assaulted his daughter and causing her bodily harm. The magistrate had determined that s 257 of the Criminal Code (WA), permitting the lawful use of reasonable force by a parent towards a child, did not apply for a defence. The magistrate reached that conclusion by referring to various academic journals which she had sought out and did not provide the parties an opportunity to comment upon. Corboy J described magistrate's reasons for the conviction of the appellant as follows:[29]

The magistrate, with those passages in mind, then posed the question, "What are the 21st Century attitudes or standards currently prevailing in the community with respect to correction of children by way of physical force?" That question was posed under in the heading in her Honour's reasons to which proposed ground 4 referred ("21st Century Attitudes"). Her Honour continued:

My research indicates that there are numerous articles, research papers and books written about the 21st Century attitude towards the correction and punishment of children.

The research all indicates that any punishment or physical correction of children is detrimental to their mental health and wellbeing as an adult. Some countries around the world have banned smacking of children completely. Although all Australian states prohibit excessive punishment in their legislation, some states have clarified the scope of parental discipline.

In order to discuss the effectiveness of discipline or correction, it is imperative to clarify the difference between discipline and punishment (reasons for decision, para 4).

Her Honour referred to five academic articles concerning the effect of disciplining children and to changes that were made to the Crimes Act 1961 (NZ) in relation to parental control as forming part of her research. Reference was also made to the conclusions expressed in an unidentified article about the effect of the legislative change in New Zealand and to articles "in 2013 and 2014" that "continue with the trend that any correction of a child's behaviour should not use physical force because of the long term detrimental effects upon their mental health and the physical wellbeing of the child" (reasons for decision, p 10).

The articles to which the magistrate referred in this section of her reasons were not tendered in evidence - as has been indicated, the parties did not contest the issues of reasonableness and the purpose for which the force had been applied by the appellant by reference to academic research or legislative changes in other jurisdictions. Further, the magistrate did not inform the parties that she intended to undertake the research to which she referred in her reasons and they were not given an opportunity to either address her on whether she should be allowed to undertake that research or the effect of the research that she had undertaken.

As would be expected, the research to which her Honour referred in her reasons was directly relevant to the findings that were made. Her Honour stated:

Was the force used by way of correction of [the complainant] by [the appellant] or was it used in retribution [the complainant] because of [the appellant's] pent-up anger and frustration towards [the complainant] because of her inconsiderate behaviour? It must be remembered that the force used must be commensurate with society's standards at the time. In 2014 the predominant standard is that any physical punishment by way of correction of a child or adolescent is detrimental to their physical and mental development (reasons for decision, para 44).

33 Corboy J referred to Re JRL and Le and held that the magistrate had overstepped the line. His Honour said:[30]

As the respondent rightly submitted, "the impugned material was central to her Honour's conclusion that any use of force is unreasonable, leading to the inevitable conclusion that the appellant's conduct was not lawful in accordance with s 257 of the Criminal Code"

34 The factual scenario in SD v The Queen (SD),[31] was similar to that in Casey. In SD, the appellant pleaded guilty to two charges of an indecent act with a child under 16 years. A Judge of the County Court sentenced the appellant to two years' imprisonment on each count. That sentence was imposed by reference to certain psychological materials which the Judge had sought out. The appellant did not bring an application for the Judge's recusal. Rather, the appellant sought leave to appeal contending that the Judge had not afforded the appellant procedural fairness, by permitting them to make submissions on the material considered by the Judge. The appellant's ground of appeal was in the following terms:[32]

The sentencing judge erred by:

(i) departing from, and going beyond, the facts as opened by the prosecutor and agreed between the parties; and

(ii) resorting to psychological materials including the definitions of paedophilia in the Diagnostic and Statistical Manual (DSM) Edition IV-TR, proposed revision of DSM V and the International Statistical Classification and Related Health Problems published by the World Health Organisation; and

(iii) failing to provide, in respect of each of these matters, an opportunity for counsel for the applicant to address, or make submissions on, the findings the judge intended to make; and in so doing denied the applicant procedural fairness.

35 The Court of Appeal (Ashley, Redlich and Priest JJA) said:[33]

It is axiomatic that a judge may not search for, or take account of, information that is not in evidence, save where a fact is of such notoriety that a judge may take judicial notice of it. Mason CJ and Brennan, Deane, Dawson and Gaudron JJ in Re Media Entertainment & Arts Alliance Ex Parte Hoyts Corporation Pty Ltd referred to the undoubted principle that a judge's decision must be made on the basis of the evidence and arguments in the case and not 'on the basis of information or knowledge which is independently acquired'. A court is not entitled to take into account factual material not in evidence without notice to the parties.

The rationale for the prohibition is to be found within the fundamental rule of natural justice that a party is entitled to know the case sought to be made against it and be given an opportunity of replying to that case. The entitlement of a litigant is to a fair opportunity to correct or contradict any relevant material which is prejudicial. As Brennan J stated in Kioa v West:

A person whose interests are likely to be affected by an exercise of power must be given an opportunity to deal with relevant matters to his interests which the repository of the power proposes to take into account in deciding upon its exercise.

The fundamental requirement of procedural fairness is that a party who is subject to the possibility of an adverse determination on the basis of any information, whatever its source, must be made aware of the case to be raised against the party, and be afforded an opportunity to respond. The judicial obligation to afford a party reasonable opportunity to present or meet a case is vital both to the reality and the appearance of justice.

One must distinguish the process of modern litigation where a judge is frequently provided with material which does not end up in evidence or where a judge is required to rule upon evidence which it is concluded is inadmissible. It is assumed that a judge then has the capacity to put from his or her mind evidence which has been seen or heard but which is not relevant or admissible to the determination of the questions before the Court. One may also put to one side those instances where a judge may take judicial notice of a particular fact, even if it is not put into evidence, which is of such notoriety that it could not be the subject of serious dispute. So also, a judge may have recourse to learned works for the purpose of refreshing his or her memory. But even in such cases where evidence may not required [sic] to prove a fact, the requirements of natural justice will ordinarily have to be observed. Judges should not so inform themselves on any contentious matter, and then act upon it, without first giving the parties an opportunity to controvert or comment upon it.

Where a court of its own motion seeks to inform itself in private on a question of fact or an opinion germane to an issue and which is by no means free from controversy the course is, as Bray CJ recognised in Cavinett v Chambers, wholly objectionable. Bray CJ made it plain that the court should not embark on such investigations except by consent. Upjohn LJ (as he then was) stated in Re K (Infants) that where a judge takes information into account which an interested party has not had the opportunity to challenge 'the proceedings cannot be described as judicial'. Such a course was considered by Scarman J in Brinkley v Brinkley 'to strike at the very root of the judicial process'.

36 The Court of Appeal in SD found that the information obtained from the extraneous materials resulted in the Judge's rejection of the opinion of an expert witness and produced a more severe sentence imposed on the appellant, than would have been imposed had the Judge not considered them:[34]

There is also force in the submission that the appellant was denied procedural fairness by the judge's resort to a body of material that she had not raised with counsel in the course of the plea. A Psychological Assessment Report prepared by a forensic psychologist, Dr Michelle Wauchope, was tendered on behalf of the appellant. Following testing, and applying her clinical experience, Dr Wauchope assessed the appellant's 'risk of reoffending in a similar or escalating manner [as] very low'. If regard had been had to the test results only, the risk would have been assessed as 'low'. The content of the report was not criticised by the prosecutor. More importantly, although the judge expressed some concern during the plea as to the 'very low' classification arrived at by Dr Wauchope, she did not alert counsel to the possibility that she would carry out her own researches and rely on material to impinge upon the views expressed by the forensic psychologist. But that is what the judge did.

After the plea hearing, the judge consulted the Diagnostic and Statistical Manual of Mental Disorders, Edition IV-TR ('DSM IV-TR'), the yet to be published Diagnostic and Statistical Manual of Mental Disorders, Edition V ('DSM V') and the International Statistical Classification of Diseases and Related Health Problems published by the World Health Organisation ('ISC'). Having done so, the judge in her sentencing remarks expressed surprise at Dr Wauchope's assessment of risk. The importance of the assessment of risk of reoffending, of course, was that it bore on specific deterrence, protection of the community and prospects of rehabilitation. An assessment of these matters in a manner adverse to the appellant had the capacity to produce a more severe sentence. Were the judge to consider diminishing the weight to be given to Dr Wauchope's opinion as to risk - which it is plain that she did - by reference to material that had not been addressed during the plea, and which the appellant had not been given an opportunity of addressing, and thereby to aggravate the sentence or reject a matter in mitigation, then it was incumbent on the sentencing judge to bring that material to the appellant's attention so that he had an opportunity of producing further evidence or making further submissions. It can hardly be contended that the DSM IV-TR, DSM V or ISC are publications of sufficient notoriety that counsel should reasonably have expected the judge to have had recourse to them in the privacy of her chambers. (emphasis added)

...As the judge appears to have treated the absence of remorse as a matter adverse to the appellant, this bearing upon his risk of re-offending, her Honour ought to have afforded the appellant an opportunity to challenge such a finding. Particularly that was so when it involved rejection of the opinion expressed by the psychologist.

37 On this basis, it was clear that there had been a breach of the hearing rule, and that consideration of the extraneous material had tainted the outcome arrived at by the Judge, entitling the appellant to relief. The Court of Appeal said:[35]

Procedural fairness must be upheld for its own sake, as well as for its consequences because 'the experience of the common law [is] that, out of fair and lawful procedures, fair and lawful outcomes will more commonly emerge'. The concern is with the fairness of the procedure adopted rather than the fairness of the outcome; with the decision-making process not the decision. The Crown accepted during oral argument that there had been a breach of procedural fairness. It was but faintly argued that the breach could not have made any difference to the sentence imposed, as it was accepted that it affected her Honour's assessment of the risk of re-offending. Even if that concession had not been made, once the breach of the rules of natural justice was demonstrated, the appellant was entitled to relief. We are quite unable to reach the necessary affirmative conclusion that compliance with the requirements of procedural fairness 'could have made no difference' to her Honour's view of the appropriate sentence. (emphasis added)

38 In Emanuele v Emanuel Investments Pty Ltd (Emanuele),[36] a Judge who was presiding over a liquidator's examination met with Counsel acting for the liquidator at a wine bar where they drank together for one hour. Debelle J considered that the private communications out of court with Counsel 'would be perceived to have the capacity to impair the independent and impartiality of his judgment'.[37] After referring to Re JRL, his Honour said:[38]

It will be noticed that, notwithstanding that the imperative that the judicial process and its integrity must be maintained and the concern to ensure that the public has confidence in the judicial process, the principle is, for understandable reasons, not expressed in absolute terms. ... it is necessary to examine the circumstances of each case and, in the case of a private communication, to examine such matters as any explanation for the communication, the nature of the communication, the situation in which it took place and its relationship to the issues for determination : cf also Wilson J at CLR 359-60 and Dawson J at CLR 371-2. But the court will not enquire whether the private communication in fact worked to the prejudice of the party against whose interests they were made; it is enough that it might do so: see Gibbs CJ at CLR 349. For the reasons which follow, I think that this observation of Gibbs CJ does not have unqualified or absolute operation in respect of a proceeding for an examination under s 596A or s 596B. (emphasis added).

In other words, the requirements of natural justice depend on the circumstances of the case: Russell v Duke of Norfolk [1949] 1 All ER 109, 118 approved in National Companies & Securities Commission v News Corp Ltd [1984] HCA 29; (1984) 156 CLR 296 ; 52 ALR 417 ; 8 ACLR 843 at CLR 311-12, 319-20, 326. That principle applies not only to the manner in which a court or tribunal must conduct itself but also to the consequences of a breach of the rules. In other instances where there has been a departure from the rules of natural justice, the whole of the circumstances have been examined to determine whether there is a reasonable apprehension of bias. The court seeks to determine whether a fair minded observer acquainted with all the relevant facts would have a reasonable apprehension of bias. ...where it is asserted that a judge has preconceived ideas concerning the issues before him, the court will examine all the circumstances to determine whether there is a reasonable apprehension of bias.

39 In Rozenes v Judge Kelly (Rozenes),[39] a Judge was presiding over a charge of trafficking heroin against four accused. They made an application that evidence of a certain proposed prosecution witness be excluded. The Judge had earlier presided over the trial of one of the accused on a charge of conspiring to import cocaine. The proposed witness had been charged with participating in the alleged cocaine conspiracy, but later assisted authorities in relation to both the cocaine and heroin trials. The Judge ruled to exclude the evidence, and in so doing, relied on matters he observed at the cocaine trial. He made comments inimical to the prosecution case. He considered the proposed witness had been coached, was lying, and described him as 'an intelligent rogue'.[40] The prosecution applied to the Judge to have him disqualify himself. Ruling on the bias application, the Judge asserted that he was entitled to have regard to the events of the cocaine trial, refused to disqualify himself and suggested the real purpose of the bias application was 'to get away from a judge who knows too much'.[41] The prosecution succeeded in the Court of Appeal. While the trial judge's statement declared an adverse attitude towards the reliability of several evidentiary elements of the prosecution's case, the Court of Appeal (Tadgell and Callaway JJA and Crockett AJA) said:[42]

It is to be clearly understood, however, as Mason J observed in [Re JRL]:

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

Thus, although a trial judge may have knowledge of facts derived from sources external to the trial, or preconceived views, disqualification is by no means automatic because of the knowledge or preconception: e.g. Laws v. Australian Broadcasting Tribunal [1990] HCA 31; (1990) 170 C.L.R. 70, at 100; Fitzgerald v. D.P.P. (1991) 24 N.S.W.L.R. 45, at 49-50. It is only if in the circumstances there might be a relevant reasonable apprehension of partiality or prejudice that any question of disqualification can arise.

There is no reason, so far we can see, why the mere conduct by the judge of the cocaine trial should have led to his disqualification from conducting the heroin trial. Certainly the plaintiffs have not suggested one. His Honour's statements in the exclusion ruling and upon the bias application and in the bias ruling in combination, however, might in our opinion lead to a reasonable apprehension of partiality or prejudice. (emphasis added).

40 This application has arisen in unique and largely unprecedented circumstances.[43] Ordinarily, an application for apprehended bias, in relation to a Judge's receipt of extraneous information, arises during the conduct of a hearing, and would therefore precede any decision the Judge may make, to which the extraneous information relates. The feared deviation from deciding the case on the merits relates directly to how that decision, subsequent to the impugned conduct, might in future come to be decided by the Judge. It calls into question innumerable possibilities of biases or influences that extraneous information may have on their decision, consciously (i.e. Casey, SD or Rozenes) or subconsciously (i.e. Re JRL or Emanuele). However, a decision has been handed down. The Reasons disclose the full extent of the Searches and it is readily apparent that they have had no effect on the decision. The importance of that fact, in the context of this application, cannot be emphasised enough. The reason for that was explained Dawson J in Re JRL:[44]

...the whole of the circumstances must be considered and such a conclusion must be firmly established and should not be reached lightly. ...Moreover, the whole of the circumstances are not confined to the conduct said to afford reasonable grounds for suspecting a lack of impartiality. They include what was done by the judge subsequently, which may be sufficient to eradicate any reasonable apprehension of bias notwithstanding an earlier lapse in the observance proper procedures. ... (emphasis added)

Or, as Callinan J explained in Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd, 'it was right [for the Full Court] in determining this issue to look not only at the course of the trial, but also the reasons for judgment, and to read them together to see whether the cumulative effect was one of apparent bias.'[45] Conversely, when read together those matters may have the opposite effect - that there is no cause for concern as to a possibility of apprehended bias.

41 Where material has been considered by the Judge, and not raised by the parties, that apprehension of bias may sometimes 'be cured by giving [the party] an appropriate opportunity to be heard at a later stage'.[46] Here, I did not afford the parties the opportunity to be heard on the occurrence or subject-matter ascertained by the Searches that had been undertaken, prior to the handing down of the Reasons. In my view, it was not necessary, given the entirety of the circumstances, as referred to above and below.[47] The conduct of the hearing, the various transcripts, and the findings made and also not made within the Reasons are, in my view, sufficient to 'eradicate any reasonable apprehension of bias'. [48]

42 As the authorities require, it is first necessary to identify the conduct of the Judge which is alleged to give rise to an apprehension of bias. In relation to the Searches undertaken by my Chambers:

(a) First, I instructed my Senior Associate to undertake a search into reported decisions of the Supreme Court and VCAT on 'Austlii'. These were obtained by way of a search which used the terms 'Kornucopia' and 'Efektiv'. The results of this search are contained within the footnote referred to above.[49]

(b) Secondly, I instructed my Senior Associate to enquire with Registry staff of the VCAT, Magistrate's Court, County Court and Supreme Court of Victoria, to ascertain the volume of litigation in which the Companies (or related entities) are engaged in.[50] The enquiries were limited to:

(i) The number of active proceedings which the Companies were, at the time, engaged in (either as plaintiff or defendant); and

(ii) Citations for any decisions (reported or unreported) which had been handed down.

43 I did not examine (or indeed, view) any of the decisions reported on Austlii (contrary to the plaintiffs' invitation for me to do so). I am unaware of the issues that were in dispute, save for issues associated with service and/or the non-payment of rental which arose in a number of decisions that were the subject of cross-examination by Counsel for Chen. I am unaware of the evidence given by the relevant witnesses or the findings made by the relevant Court or VCAT. The evidence given, issues considered and findings made in those decisions were and are irrelevant to this proceeding and I did not have any regard to them in determining the issues which arose. The same is true with respect to the enquiries made with other Courts and VCAT. No information was ascertained as to the issues in dispute, the evidence given or the subject-matter of the proceedings.

44 The only fact drawn from the Austlii Searches was the number of reported decisions and their associated citation. The only fact drawn from the enquiries with other Courts and Tribunals was the number of proceedings commenced in the 2019 calendar year, broken down into those finalised within the same year or remaining active as at the date stated in the footnote within which they are referred to. In evidence, Xu and Youl, directors or employees of the Companies estimated that there were approximately 50 proceedings on foot in VCAT. It was clear that this was an estimate, and they were unable to be more precise. Without in any way criticising their evidence, the Searches (perhaps) revealed a more precise number (which included a substantial number of matters that had been finalised), a matter of no relevance to the Reasons, but not irrelevant to background and context.[51] That matter was expressed in neutral terms within the Reasons, and no inferences or conclusions were drawn from it.

45 Given the nature, extent and limited use of the information provided by the Searches, a fair-minded lay observer would not in my opinion apprehend any predisposition or bias. It cannot be said, and there is no basis to infer, that the Searches were anything other than formal enquiries, with Registry staff of the various Courts or VCAT with no knowledge of the issues engaged in the case that is before me. The Companies seek to look beyond the fact of the Searches, and contend that there was the possibility of some improper motive or subconscious bias that the lay observer might discern. There is none.

46 In analysing the nature and effect of the inquiries which had been made, in order to assess whether there is any logical connection between the conduct and the feared deviation, it is worth noting the following characteristics of the Searches, which make them distinguishable from the authorities discussed above:

(a) In Re JRL, Le, Casey, Emanuele and SD the inquiries had been undertaken personally by the Judge. In Re JRL it was a discussion between the counsellor and the Judge in Chambers. In Le, the magistrate conducted the Google search personally. In Casey and SD the judicial officer sought out the academic articles or psychological materials personally. In Emanuele, the Judge met with Counsel acting for one of the parties. In this case, the Searches were undertaken by my Senior Associate, and my knowledge of any facts ascertained from the Searches is limited to the information that is set out within the footnotes referred to above.

(b) The content of the extraneous information in the authorities referred to above is in stark contrast to the content of the Searches in this case. In Re JRL it was an extensive conversation with a potential expert witness who would, in all probability, give critical evidence in the case before the Judge. While the witness was impartial, it was known that the witnesses' evidence would heavily favour the case of the wife. The conclusion of a reasonable apprehension of bias was clearly justified. Commenting on Re JRL in Carbotech-Australia Ltd v Yates (Carbotech), Brereton J said:[52]

Thus in JRL, it was of decisive importance that the court counsellor - a person whose opinion might be thought to carry weight with the judge - had made strong representations to the judge on the merits, in private, which it was not unreasonable to suppose may have influenced the judge adversely to the husband's case.

That situation was analogous to the private conversation with Counsel in Emanuele. In Le, the subject of the inquiry was a matter that went directly to the critical facts on which the accused's defence to the charges was based - the existence of labour hire companies which had care of the workers, which the accused was alleged of housing illegally. In Casey, the numerous academic articles went further - they formed part of the ratio of the decision 'leading to the inevitable conclusion that the appellant's conduct was not lawful.'[53] In SD, the extraneous information went to various sentencing factors and resulted in the Judge's rejection of psychological evidence adduced by the appellant. In each case, far from being matters relevant only to context, they went to the heart of the issues for determination, thereby establishing the necessary rational connection.

(c) In Le, the prosecution did not object to the application. As EM Heenan J described:[54]

This is an important feature of this case because it gives an indication that counsel for the prosecution and his client recognised that there may be a material risk of a perception of absence of impartiality or objectivity and in those circumstances the occasion was one which favoured the learned magistrate withdrawing from any further participation in the trial. ...the position of the prosecution was an important warning which, in my respectful view, should have received greater recognition and significance.

That too was the situation in Casey where the respondent conceded that the appeal should be allowed, and the conviction quashed.[55] Here the plaintiffs, both Chen and Madgwicks, vigorously oppose the application.

(d) In Re JRL, Le and Rozenes the trial had not run to its conclusion, such that reasons had not been handed down. That was not the case in Casey, SD, and nor is it here.

(e) In Casey and SD, the extraneous information was directly relevant to the accused or appellant's case on conviction or sentence and contradicted the evidence or submissions they had presented. That information formed the basis for the judicial officer's rejection of that evidence or submission, and was expressed as such in their reasons. Whereas, here, the Reasons disclose that I have not actually made factual findings or rejected any matter based upon information ascertained by the Searches. That information supported uncontentious matters, that the Companies were 'busy' and 'engaged in substantial litigation'.[56] It was not used as the basis to find an inconsistency with the Companies' evidence.[57]

(f) In each of those decisions the respective Courts stressed the importance of events subsequent to the conduct said to give rise to a reasonable apprehension of bias, or the Judge's conduct subsequent to the same, for this may allay any such reasonable apprehension. In Re JRL it was the Judge's disclosure to Counsel, and invitation for submissions on the matters discussed. In Le, it was the questioning based upon the impugned searches, and the magistrate's disclosure and explanation in not recusing herself. In Casey and SD it was the magistrate's reasons for the decision eventually handed down. In Emanuele, Debelle J referred and had regard to the Judge's explanation, 'that it was an innocent social occasion' and that while 'reassuring', it could not 'entirely dispel any reasonable apprehension of bias.'[58] In Rozenes, it was the Judge's rulings on the exclusion and apprehended bias applications (which emphasised, rather than negated any apprehension of bias).

47 Having identified the Searches, the critical enquiry is whether, as a result of embarking on the Searches or in having regard to the information obtained from the Searches, a fair-minded lay observer might reasonably apprehend that those Searches and the making of the Statements might have an effect on my ability to be impartial.

48 That critical enquiry, therefore, is whether a fair-minded lay observer might reasonably consider that there might be a logical and rational connection between the Searches and the Statements and the ability of the Judge to remain impartial. By contrast to the cases and analysis referred to above,[59] no logical connection is apparent. As EM Heenan J explained in Le, the searches conducted by the magistrate in that case could provide grounds for concluding that the magistrate was 'doubting the credibility or reliability of the witness', and the questions which were said in reliance of those searches, were 'capable of implying, and in my respectful view did imply, a challenge to the credibility and/or reliability of the witness based on the extraneous enquiry'.[60] This is one way in which the Companies put their application. The Companies contend that the Statements, referred to above, disclose that feared deviation, both in terms of doubts perceived with respect to the Companies' evidence, and factual issues still to be determined.

49 Insofar as it may be suggested that the fair-minded lay observer might consider that the Searches might have been undertaken because the Judge had doubts as to the credibility or reliability of the defendants' witnesses, or that the Judge was predisposed to rejecting that evidence, or would not accept their evidence, unless it could be otherwise verified, this clearly and demonstrably is not the case (and would not be viewed as such). The authorities establish that one is not only concerned with the mere fact that extraneous inquiries have been made. How a member of the public would observe any subsequent use of that extraneous information is also relevant in ascertaining any apprehension of bias or a lack of impartiality.[61] In the unique circumstances of this case, the Reasons have been handed down, and the fair-minded lay observer must have regard to those Reasons in considering whether the Searches might lead to a reasonable apprehension of bias, either in the issues which have been determined and are contained within the Reasons, or in my approach to the further conduct of this case.[62] A fair consideration of the Reasons leads to the conclusion that the Searches had no effect or consequences on the Reasons or the result.

50 The passage from Hamod cited above confirms that in considering whether to accede to an application for a Judge's recusal, it is of utmost important that conduct is not considered in isolation or taken outside of their context.[63] The Court, in determining the application, or on any review or appeal, is entitled to have regard to the conduct of the trial or proceeding as a whole, the transcript of hearing, and in this case, the Reasons that have been delivered. In Re JRL, Mason J said:[64]

The circumstances of each case are all important. They will include the nature of the communication, the situation in which it took place, its relationship to the issues for determination and the nature of the disclosure made by the judge.

51 In S & M Motor Repairs Pty Ltd v Caltex Oil (Australia) Pty Ltd, Priestly and Clarke JJA explained that for the apprehension of the parties or the public to be reasonable, it must arise upon an understanding of the actual circumstances in which the claim of possible bias is made. Their Honours then said:[65]

We stress that whenever a court is called on to decide whether disqualifying bias or apprehension of bias exists all the circumstances of the particular case must be looked at.

52 In Carbotech, Brereton J considered whether a reasonable apprehension of bias on the part of a special referee arose in circumstances where the referee communicated with one party only on a matter of administration and procedure.[66] His Honour considered Re JRL and made the following observations:[67]

...the process by which that conclusion [of bias in Re JRL] was reached illuminates the relevance and importance of the circumstances of the individual case in determining whether an inference of apparent bias will be drawn from the fact of communications between a judicial officer and one only of the parties...

The passages to which I have referred in JRL establish that while the (mere) fact that an ex parte communication takes place is an important one, it is not decisive, and closer examination may show that the informed reasonable lay observer might not form an apprehension of bias despite such communications. It will depend on the facts of each case whether communications between a judicial officer and one party to the exclusion of the other give rise to a reasonable apprehension of bias, and one must look to the whole of what happened to establish whether such an apprehension should be inferred. The reasonable and fair minded lay observer according to whose standards the question of ostensible bias is judged is taken to have knowledge of the material objective facts...that for the apprehension of the parties or the public to be reasonable, it must arise upon an understanding of the actual circumstances in which the claim of possible bias is made...

Moreover, where a judge is concerned, the mere fact of an ex parte communication is of importance, though not decisive, because it is such an obvious departure from the norms of behaviour understood by judges and the legal profession alike. ... Thus in JRL, it was of decisive importance that the court counsellor - a person whose opinion might be thought to carry weight with the judge - had made strong representations to the judge on the merits, in private, which it was not unreasonable to suppose may have influenced the judge adversely to the husband's case.

54 In that case, Brereton J concluded that an Associate Judge erred in concluding that a reasonable apprehension of bias arose from the mere fact of the single party communications, without examining the content of the communications and the context within which they were made.

55 In Johnson v Johnson (Johnson), the Judge ordered the appellant to list as discoverable certain transcripts of proceedings in a previous investigation by a corporate regulatory authority. He explained that he would rely principally on witnesses other than the parties in the matter, and on documents in order 'to determine where the truth lies.'[69] The Judge refused an application for his recusal and explained that the statement was not to be taken as a pre-determination of credibility, but merely expressing the need to look at other evidence to determine where the truth lay, given the wide divergence between the evidence of the parties. The Judge's refusal was upheld by the High Court. Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ said_:_[70]

If one were to remove some of the words used by Anderson J from the context of the ruling on discovery, and the reference back to earlier statements, then, upon parsing and analysis, they could possibly have created an impression that the judge was discounting the credit of the respondent (whose evidence he had heard) and of the appellant (whose evidence he had not heard). To isolate the words in that way would not have been reasonable. When, on the following day, the judge gave an explanation of what he had intended to convey by his earlier remarks, there was no reasonable ground for not accepting that explanation. A reasonable observer would not have imputed to Anderson J, who had not yet heard the appellant give evidence, a view that the appellant was a person whose credit was of no worth.

56 In relation to the decision made, the Searches did not lead to the making of any direct finding of fact or credit adverse to any witness. Nor did the Searches expose primary facts which might have permitted an inference to be drawn, in circumstances where those primary facts had not already been exposed by the evidence. The decision the subject of the Reasons was made on the evidence and the relative merits of each party's submissions. A lay observer, aware of the relevant facts and circumstances, would observe that. Likewise, I do not consider that a fair-minded lay observer might reasonably apprehend that, as a result of the Searches and Statement, I might not bring an impartial mind to the questions which are yet to be decided. The content of the Searches simply have no connection to those questions. Further, for the reasons which are set out below, I do not consider that the Searches were matters which I was required to raise with the parties.

57 The basis of the Searches - the number of other proceedings in which the Companies are parties - did not have any direct bearing on the facts and circumstances pertaining to service of the statutory demands or the technical defects described in the Reasons.[71] Of the decisions referred to above, Casey and SD illustrate, and I have stressed with some vigour, the mere fact an independent inquiry has not been made should not be considered in insolation or determinative of an application for recusal. Where a decision has been handed down, it is necessary to consider the mode by which the information was gained; the substance and content of the information; and the subsequent events, namely the use made of the information, in order to determine whether it may, in all of the circumstances, give rise to the possibility of the contended apprehension of pre-determination.

58 That is not to say that the impugned material must always be 'central' to some finding of the Judge, as it was in Casey; but there must be some rational or logical connection between the Searches which have been conducted, and the knowledge or finding which it is said to have impermissibly led to, in order to make out a reasonable apprehension that a party might not receive an impartial hearing. Indeed, for the lay observer to appreciate whether such a connection exists, they must understand the context, objectively ascertained, in which the Searches were conducted and findings were made in the Reasons. A 'reasonable member of the public is neither complacent nor unduly sensitive or suspicious' and would not, without reasonable grounds informed by the relevant context, attribute an improper motive or the risk of subconscious bias having infected their decision, but not expressed within their reasons, to the conduct of a judicial officer.[72]

59 The First Statement to which the footnote relates, provides some background and context, for the proposition based upon the evidence of the witnesses, that the Companies were busy and engaged in substantial litigation:[73]

Secondly, even accepting the Companies' mail arrangements, the Companies were very busy and Youl was engaged in many other aspects of the business. He gave evidence that, while present on a full time basis while working as a project coordinator or manager for the Companies, he had other responsibilities, such as negotiating with suppliers or liaising with customers or other stakeholders. He added that he 'had quite a few different responsibilities' and he would 'hover around'. Given the nature of the business, the volume of activity and the numerous legal proceedings on foot to which the Companies are parties, it is not unreasonable and is more probable that following delivery, the Demands were simply mislaid. Although Youl gave evidence that the mail came to him, it did not always come directly to him, or he was not directly and solely responsible for its collection. Everyone had access to, and could have collected or picked up mail pushed under the door. Indeed, in evidence, Youl recalled instances where, if he was not present at his desk when mail arrived, another staff member would put that mail on his desk. (emphasis added)

60 The fact that the Companies were and are engaged in substantial litigation is a fact, established by the evidence, apart from the Searches, and not only open for me as a finding, but indeed accepted by the Companies' witnesses. As I said in the Reasons:[74]

In evidence, officers of the Companies estimated that the Companies were engaged in approximately fifty different matters in VCAT (which have led to various judicial review applications and appeals in this Court) in which rental arrears and/or possession orders are sought.

61 The evidence of Xu and Youl, giving rise to that finding, is referred to in a footnote earlier in the Reasons (but not extracted within the Reasons).[75] I note that the questions, and answers given in response, were not objected to by the Companies. Xu gave the following evidence:[76]

Sifris J: You have many cases at VCAT; is that correct?

Ms Xu: Yes.

Sifris J: How many?

Ms Xu: Um, I can't - can't right now, but -

Sifris J: 20, 50, 100?

Ms Xu: Um -

Sifris J: How many?

Ms Xu: Fifty.

Sifris J: Fifty cases at VCAT?

Ms Xu: Yes.

Sifris J: Is that right?

Ms Xu: Yes.

Sifris J: And are these all by landlords seeking possession of their premises?

Ms Xu: Well, um, most of them, yes.

...

Sifris J: Because of unpaid rent?

Ms Xu: Yes.

Sifris J: Is that right?

Ms Xu: Yes.

62 To the same effect, Youl gave evidence as follows:[77]

Mr Miller: If you turn to p.42, please, of the bundle. Sorry, page 40. This is the case of Ho v Kornucopia. Do you remember this case?

Mr Youl: Um, I don't remember it immediately, but -

...

Mr Miller: Is that because there have been so many of these cases you can't recall this one exactly?

Mr Youl: Yes.

Sifris J: How many have there been, about?

Mr Youl: As Lulu [Xu] mentioned, perhaps in the region of 40 to 50. ...

63 Xu gave evidence of whether, in her opinion, the Companies were 'busy'. Xu gave evidence that:[78]

Sifris J: Is the company a busy company?

Ms Xu: Yes.

Sifris J: Does it receive lots of mail?

Ms Xu: Yes.

Mr Lovell: You said earlier under cross-examination from my learned friend down the end of the Bar table that your company is very busy?

Ms Xu: We are, yes.

Mr Lovell: Well, how many employees are there?

...

Ms Xu: Five to six.

Mr Miller: Do you recall Ms Xu saying that to the VCAT member?

Mr Youl: No, but it doesn't sound like an outlandish statement to say that the company is a busy corporation.

65 The Searches, and the number of proceedings which the Companies are or were engaged in did not affect, and could not be seen to have affected, the findings which have been made. The evidence, referred to above, establishes that the Companies were (a) busy; and (b) engaged in substantial litigation. The establishment of those facts is and was not dependent on whether the Companies were engaged in 50 or 200 proceedings. Had the Searches not been conducted, those findings would have been made (as they were) upon the evidence that was the subject of cross-examination, re-examination and submissions. In other words, they did not, in this respect, influence the Reasons. The required deviation and rational connection has not been established. The content and use of the Searches and their relation to the (uncontentious) factual matters, is a far cry from the content and use of the extraneous inquiries or information in the authorities discussed earlier.[80]

66 The Second Statement must be read in the context in which it appears in the Reasons:[81]

It is not necessary for present purposes to explore the limit any further. All of the issues raised by the Companies are (where and to the extent that such defects have been found or may arise) technical defects or irregularities of an inconsequential nature, such that I am not permitted to dismiss the applications, but rather get on with the real substance of the applications. This is what I propose to do. It is in the interests of all parties including the Companies. The Companies are involved in substantial litigation in VCAT and in this Court and are entirely familiar with the relevant procedures. There is no injustice and given the context and circumstances, no substantial injustice. (emphasis added)

67 That passage as to 'substantial litigation' cross-references the footnote derived from the Searches. The point is the same as the First Statement and it is not necessary to say anything further.[82]

68 In my view, the conduct of the hearing, and the result ultimately reached, should be dispositive of any reasonable apprehension that I might not be impartial.

69 The Companies contend the Third and Fourth Statements are 'misrepresentative and prejudicial'. For ease of reference, they are repeated here:

(a) The Third Statement - Within footnote 2, after referring to Xu and Youl's evidence of the fifty proceedings in VCAT, I said: 'The number is much higher.'

(b) The Fourth Statement - Within footnote 3, quoted above, I said: 'In many cases the validity of service was an issue.'

70 In particular, the Companies contend that from the Searches and Statements made, the fair-minded lay observer might discern a Judge's predisposition to entertain doubts as to the credibility or reliability of the Companies' witnesses. This submission, in my view and in light of how the conduct of the hearing of the preliminary issues proceeded, has a distinct air of irony.

71 There were a number of matters which Counsel for Chen sought to cross-examine upon or urged me to find, pertaining to previous decisions of VCAT in which the Companies were parties, or evidence given in such proceedings. These were matters relevant only to credit and to which I did not have regard (although I permitted very limited cross-examination).[83]

72 There were three distinct credit issues (as seen by the plaintiffs) raised. Each of these was rejected.

73 First, Counsel for Chen contended that the evidence given by Xu, to the effect that the Companies had meticulous procedures to manage the receipt of mail, was inconsistent with evidence apparently given in another proceeding before VCAT. Xu had (apparently, or according to the reasons of the relevant VCAT decision cross-examined upon) said in evidence before VCAT that the Companies were 'busy'. Chen submitted that this would constitute a prior inconsistent statement. This 'inconsistency' was not found or referred to in the Reasons and I did not have regard to that line of questioning or the answers given by Xu.[84]

74 Secondly, Counsel for Chen cross-examined each of the witnesses on the case of Panimo Nominees Pty Ltd v Vasiliki Lobsters Melbourne Pty Ltd (Vasiliki Lobsters).[85] It was contended that the affidavit evidence of those witnesses, deposing to the Companies' mail procedures was drafted so as to replicate the evidence that was given in Vasiliki Lobsters. I said the following in a footnote:[86]

Counsel for Chen submitted the Companies' affidavits ought to be treated with some suspicion or caution, for it was submitted that they are 'strikingly similar' to paragraphs [7] to [9] of Vasiliki Lobsters and drafted in a manner so as to replicate the evidence that gave rise to inference of non-delivery there. Counsel for Madgwicks supported this submission, by referring to the fact that the affidavits which detailed the mail system were only affirmed after the submissions had been filed, which submissions included reference to Vasiliki Lobsters, but not the mail procedures. Counsel for Madgwicks went further, and said that this approach would tend to explain why there had been a 'patchwork' approach to the Companies' affirmation of affidavits deposing to the relevant facts and matters. It is not necessary to and I do not have regard to these matters. (emphasis added)

75 Thirdly, Counsel for Chen sought to cross-examine on a number of previous VCAT decisions. Counsel sought to establish a tendency or pattern of behaviour in which, it was contended, the Companies habitually evaded service or would put service in issue in the relevant proceeding, in order to, it was contended, delay the application and/or have it dismissed. The inference Chen sought me to draw was that the evidence given relating to the non-receipt of the statutory demands was false. Whilst initially entertaining it, I directed that this line of questioning should not be permitted to go any further. As is evident from the Reasons, given that it is not referred to, I did not rely upon or use any of the oral evidence that was given on the topic. I also rejected the tender of previous decisions which were cross-examined upon by Chen and informed the parties that I would not have regard to them.

76 The following transpired during the cross-examination of Xu: [87]

Mr Miller: I want to suggest to you that you and Kornucopia have had a long history of denying valid service of documents posted to Kornucopia; do you agree with that?

Ms Xu: No.

...

Mr Williams QC: Well, Your Honour, that's the question which is - goes to credit. My learned friend has got an answer. That's the end of it.

Mr Miller: ...There are about five cases in VCAT and this Supreme Court where Kornucopia denies receiving documents at the registered address, establishing a pattern of conduct in respect of this same

Sifris J: Well, ask that without reference to any documents.

77 The cross-examination proceeded on a number of imprecise questions and answers relating to whether service had been disputed in previous cases. Reference was made to one particular VCAT proceeding and Senior Counsel for the Companies objected to any further questioning. I acceded to this objection:[88]

Mr Miller: Ms Xu, I put it to you that in the case of Z v Kornucopia before Member Buchanan, you gave evidence that a notice of hearing was not received by you at your personal address as recorded in the ASIC search for Kornucopia; do you agree with that or not?

...

Mr Williams QC: I object, Your Honour.

Sifris J: Yes.

Mr Williams QC: We're now not going into - the point of the question - Your Honour can see what's going on here. The point of all of this is to try and just besmirch the witness' credit by findings that have been made by tribunal members. Your Honour well knows that that's improper and shouldn't be allowed.

My learned friend keeps trying to do it by this alternate means of pretending to ask questions about one topic when, in fact, he's trying to pollute Your Honour's mind with evidence or documents about something else.

Now, Your Honour asked Ms Xu a number of questions about this issue, and Ms Xu was very frank that, yes, there had been issues about service in other cases, but she has not said that there's been a case where a document was served at the registered office but that's been denied. That's the critical question.

Otherwise, Your Honour is being asked, effectively, to relitigate or hear a relitigation of all of these previous matters where there's been an issue about service, and Your Honour can't and shouldn't do that when this is an issue as to credit.

Sifris J: Yes, I won't allow any further questions on these sorts of topics.

Mr Miller: Yes, Your Honour.

Sifris J: There's also the requirement under the Evidence Act if you want to lead similar fact type evidence, propensity type evidence an[d] all of the rest of it, but we've got all the evidence. I don't think this is going to assist me in resolving the matter. As should be evident from the Reasons; credit findings were not made against the witnesses for the Companies on the basis of the previous decisions or litigation which the Companies were engaged in.

78 Counsel for Chen attempted to canvass similar matters in his cross-examination of Kuksal. The following exchange occurred between Counsel and I:[89]

Sifris J: So all you're seeking to establish is that the company has denied service on a number of occasions.

Mr Miller: Yes, Your Honour.

Sifris J: And that might be right, that might be wrong.

Mr Miller: Yes, Your Honour.

Sifris J: That, in itself, establishes a pattern but an irrelevant pattern unless you can complement that with findings that the denial is not correct. You've referred to the one finding by a member, for whatever that's worth. Are any of the others - are you going to refer to any findings?

Mr Miller: No, Your Honour.

Sifris J: Well, then, I won't allow any further questions.

79 One would think, if a Judge were pre-disposed to take the course of rejecting the truthfulness of the Companies' evidence, the issues, evidence and findings of those previous VCAT decisions would have been highly relevant to that Judge. I did not have regard to such matters.

80 In relation to the Third Statement, I simply noted that '[t]he number is much higher' after referring to the estimated fifty proceedings active in VCAT.[90] This was not the basis of a credit finding, as should be apparent from the Reasons, and in particular, the conduct of the hearing referred to above. I noted that the 'officers of the Companies estimated' that approximately fifty proceedings were on foot. As should be plain, the comment was doing no more than correcting what appears to be an imprecise estimate, on a matter of context or background. That is distinct from entertaining a doubt as to the credibility or reliability of a witness.[91]

81 The Third Statement is not expressed as an 'inconsistency'. It is expressed in neutral terms as a fact. It is not referred to again. It did not lead to the drawing of any inference or conclusion, let alone one adverse to the Companies. One can take, as a matter of common sense, that the words a Judge chooses to express him or herself in their written reasons are usually the result of a deliberate and considered decision. So where a matter is stated in such terms, one can then take it as a fact, that the Judge has been careful not to cast an aspersion on the matter or parties before them. To put it simply, the Companies' submission requires straining or extracting something out of the language of the Third Statement that simply is not there.

82 The Companies submitted that the Fourth Statement, 'when taken into context with the dispute around service in the current proceedings is misrepresentative and prejudicial.' It is contended that this statement might disclose or suggest to the fair-minded lay observer the possibility that the Judge would be pre-disposed to find against the Companies on the issue of service based upon either, issues raised or findings made, in relation to service in previous proceedings referred to in the footnotes. However, as pointed out the Judge refused to permit cross-examination proceed any further or draw the inference, as sought by Chen, to the effect of a pattern of behaviour in relation to the service of documents. That is an objectively ascertainable fact derived from the evidence, to which the fair-minded lay observer would have regard in rejecting the contended apprehension.

83 Furthermore, and to the extent that it was submitted that there was no evidence of other cases in which service was in issue, it is worth referring to the following extract of Kuksal's cross-examination:[92]

Mr Miller: Mr Kuksal, do you agree with this proposition that Kornucopia has denied receiving documents at its registered address in court proceedings in the past?

Mr Kuksal: When you say court proceedings, um, do you mean proceedings in the VCAT?

Mr Miller: Okay. ...Or in the Supreme Court of Victoria; do you agree with that?

Mr Kuksal: Ah, I'm aware of some instances where, um, service was not properly effected. Um, I am not personally involved with, ah, all the cases so, um, I'm - I'm aware that there were cases where, ah, there had been instructions given to solicitors and/or members representing Kornucopia to make the argument that service was not affected. In fact, quite a while ago when I was a director and more actively involved, I am aware that there were instances where documents were not served appropriately and those submissions were made, yes.

84 Kuksal's affidavit affirmed on 3 December 2019 states that the Fourth Statement, 'taken into context' is 'grossly misrepresentative', 'because in other Supreme Court proceedings the facts around service were not in dispute and the proceedings were simply focused on questions of law regarding the legislative meaning and/or intent with respective [sic] to specific service provisions of the Residential Tenancies Act 1997 (Vic).' That was a matter raised in cross-examination.[93] It is, however, a distinction without a difference. First, the language used, namely that service was 'in issue' encompasses a scenario where the factual question of service is denied, as well as the scenario where service has not been effected according to statutory requirements. The Fourth Statement does not say, for instance, 'In many cases delivery of documents has been denied'. Further, the generality of the Fourth Statement highlights that regard has not been had to the issues in dispute in those decisions. Secondly, the lay observer would be unlikely to appreciate the difference between service in fact not having occurred, and service not having been carried out in accordance with statutory requirements. The precise relevance or significance of this matter has not been articulated, insofar as this application is concerned.

85 The Statements should be considered together. The crux of the Companies' submission is that by the independent and extraneous Searches, the volume of (substantial) litigation (which, it was contended, was unverified and unverifiable and in respect of which no opportunity given to make submissions on) exposed a substantial potential[94] difference between the estimate given by the directors and others (50) and that 'established' or arising out of the Searches (185). The difference (the Variance) it was submitted might have an effect on the Judge's assessment of the accuracy or indeed reliability (or even honesty) of any evidence given by the relevant witness in the future. That which is in the back of one's mind cannot be eliminated, it was contended. There is, as a result, a possibility of predisposition or bias in relation to any further evidence. Further, it was submitted that the argument did not lose cogency or potency because (although it was not conceded), the Reasons were based upon the evidence given on behalf of the Companies and not as a result of any credit findings which were specifically avoided and rejected.

86 In my opinion, in the circumstances and context of this case, a fair-minded lay observer would not in relation to the number of cases, 'reasonably apprehend that the Judge might not bring an impartial mind to the resolution of the questions the Judge is required to decide',[95] simply because the Variance was noted.

87 First, and most importantly, the difference in the number of cases or the Variance was simply stated as a fact, despite the assertion of inaccuracy by the Companies. The Variance was stated in neutral terms, and then nothing further was made of it. There was no suggestion at all that the witnesses were untruthful in their estimate and as noted no credit findings were made. The relevant findings were made and capable of being made on the evidence given by the Companies.

88 Second, why would the existence of the Variance, in respect of which no findings (and in particular, no credit findings) have been made, predispose the Judge to approach the evidence of those witnesses with bias or caution and not with an open mind. No adverse comments about the witnesses have been made or found and there is (unlike the other cases referred to) nothing to suggest that the Judge will not approach their evidence in the usual way. To suggest otherwise in the circumstances is to misunderstand the nature of the judicial function. Although this is referred to in more detail below, it is appropriate to note that 'the hypothetical observer's reasonable apprehension falls to be decided against the standards of ordinary judicial practice'.[96] To the same effect, in Johnson, Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ said_:_[97]

At the same time, two things need to be remembered: the observer is taken to be reasonable; and the person being observed is "a professional judge whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial."

89 Third, in my opinion, apart from the matter under consideration none of the other factors have any substance, for the reasons given. The suggested potential Variation issue alone does not provide a sufficient basis for any reasonably apprehension of bias. Any such apprehension is by no means 'firmly established'[98] and the authorities require me not to 'accede too readily to suggestions of the appearance of bias' unless there is a 'proper reason'.[99]

90 Fourth, in the cases referred to there is some comment, statement or conduct that might possibly cause or predispose the Judge to decide a case other than with an open mind based upon the evidence. Thus, independent research on a relevant issue or adverse findings or critical comments might create this apprehension in the fair-minded lay observer. Identification of the Variance, as a result of the Searches, falls far short of the type of cases referred to and considered above. The Searches were not directed to and had no effect on any issue, let alone a critical issue in the case. The evidence from the Companies was sufficient. Further, no adverse comments, criticisms or credit findings were made. The Judge specifically avoided any such issues as is referred to in the conduct of the hearing. In the circumstances, the fair-minded lay observer, far from having any apprehension of bias, would in fact consider that the Judge, being seized of the matter and having concluded various preliminary and largely technical matters should indeed continue with the case. Of course, that is not to say that cost and efficiency are considerations capable of outweighing an apprehension of bias, where that is made out. But as explained, there is none. During the course of case management and interlocutory proceedings, Judges often make comments, not entirely neutral and tease out issues. Questions are often raised and propositions tested by reference to the adequacy of the proposed evidence, the pleadings and explanations from Counsel of those matters. In this entirely common exchange between the Bar and the Bench, critical comments are often made. They are made all the time. As Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ said in Johnson:[100]

Judges, at trial or appellate level, who, in exchanges with counsel, express tentative views which reflect a certain tendency of mind, are not on that account alone to be taken to indicate prejudgment. Judges are not expected to wait until the end of a case before they start thinking about the issues, or to sit mute while evidence is advanced and arguments are presented. On the contrary, they will often form tentative opinions on matters in issue, and counsel are usually assisted by hearing those opinions, and being given an opportunity to deal with them.

Why should a Judge recuse him or herself when he or she forms and communicates a preliminary view that a case seems fanciful or that the evidence of a witness may not be sufficient to make out the case? Our fair-minded lay observer is, of course, aware of this necessary feature of modern litigation.

91 Finally, in dealing with interlocutory or preliminary matters, rulings, comments and statements ought not to be regarded as giving rise to a reasonable apprehension of bias 'unless they indicate a significant level of prejudgment in relation matters relevant to the final resolution of the proceedings.'[101] There is no prejudgment and certainly none that has an effect on the final resolution of the proceedings. In Kornucopia, and as noted, the only issue is solvency.[102] In the other matters any factual dispute will be approached and resolved in the usual way, that is based on the admissible evidence. The issues referred to will have no bearing on such resolution. Given the standards of ordinary judicial practice, there is not even a remote possibility of any deviation, let alone a real possibility.[103] Indeed, Senior Counsel for the Companies remarked at the hearing of this application, that such comments are usually of immense assistance in drawing attention to matters which Counsel had not considered themselves.

92 Judges are often required to exclude inadmissible, and often prejudicial material. Evidence may be admitted or used for one purpose but might be inadmissible for some other use or purpose. A Judge may learn of a dispute or a party, through the news or media, in circumstances where that material is prejudicial to one or both parties. A Judge may have intimate knowledge of the facts of a relevant proceeding or its parties, from proceedings previously before the Judge. Judges may hear of the conduct of one or other of the parties from proceedings before other Judges of a Court. The Judge is well aware that knowledge gained from any of those sources is not to be used in the determination of an issue before the Judge. The Court in SD said: 'It is assumed that a judge then has the capacity to put from his or her mind evidence which has been seen or heard but which is not relevant or admissible to the determination of the questions before the Court.'[104]

93 Each case must be assessed according to its own circumstances and context. When this is done, as illustrated above, there can be no cause for concern of any such apprehension.

94 The Companies further submit that a fair-minded lay observer might reasonably apprehend that I might not bring an impartial mind to the determination of the cross-claim which Kornucopia maintains against Chen.[105] This is the cross-claim in which Kornucopia contends Chen has failed to provide a right of quiet enjoyment, on the basis of its failure to 'rein in' (to use the words of Senior Counsel for the Companies) abusive conduct engaged in by the Owners Corporation.

95 First, the Companies contend that there was no evidence of the cross-claim in this proceeding, or of other landlords not having been paid, or of Kornucopia maintaining such claims against those landlords. Secondly, the lay observer might apprehend that, given that there was no evidence, my understanding of these matters must have been a result of my 'independent concerted effort to discover facts about The Companies that were ostensibly relevant to their case.' Thirdly, my remarks at the directions hearing of 24 October 2019, and reiterated in the Reasons, might be construed by the lay observer as a dismissal of the claim, prior to its hearing in the future. The Companies submit, in full:

[11] Additionally, in his published reasons Justice Sifris went on to state that Mr Jeffrey Chen and other landlords with whom The Companies were engaged in legal proceedings had not been and were not being paid rent despite The Companies earning revenue from subleasing or licensing their properties to its customers. His Honour also noted that the main complaint of the Companies against the landlords arose from "the racist abuse (or similar misconduct) by some of the Owners Corporation", although "it is not apparent and has not been explained what this has to do with the" landlords, "and indeed what the loss is, especially if Kornucopia's subtenants have continued paying rental to the company."

[12] The aforementioned information had not been submitted into evidence in The Proceedings. It is the Defendants' understanding that His Honour's awareness of these matters was a result of His Honour's independent concerted effort to discover facts about The Companies that were ostensibly relevant to their case in the current proceedings, including the credibility of their evidence. It is especially noteworthy that The Companies refute the veracity of His Honour's statements above.

...

[15] Finally, during the hearing of 24 October 2019, Justice Sifris made a number of prejudicial remarks about The Companies and their beneficial owner, in addition to plainly dismissing their claims against the landlords (including Mr Jeffrey Chen and two supporting creditors) as "extravagant".

96 The submission that the 'aforementioned information had not been submitted into evidence' is, on all accounts, factually incorrect.[106] On 11 September 2019, Kuksal affirmed an affidavit in this proceeding. In that affidavit, he deposed to the existence of the dispute between Kornucopia with the relevant Owners Corporation, and that Kornucopia 'possessed several apartments in the building'. Kuksal deposes to the following, in full:

[8] Regarding the specific Premises, I had advised the Plaintiff, through Ms Dangov, that the unit would be utilised by the company for its own use, including the accommodation of staff and clients of the business. It was also made very clear to the Plaintiff, through Ms Dangov, that Komucopia [sic] was a serviced apartment business and possessed several apartments in the building for that purpose.

[9] Soon after, on or around November 2018, Kornucopia's relationship with the management team of the building's Owners Corporation [Owners Corporation] began to deteriorate. Members of my staff were harassed, stalked, racially abused and physically attacked. This caused a major disruption to the business's operations.

[10] The Owners Corporation's abhorrent, improper and intimidating behaviour steadily continued without abating. Specifically, the agents of the Owners Corporation made it impossible to have quiet enjoyment of the Premises.

[11] The Owners Corporation and agents acting on their behalf continually sought to disrupt our business, as they were ideologically opposed to the serviced apartment industry and had a conflict of commercial interest.

[12] Per above, they disrupted our business by racially abusing and harassing Kornucopia's staff, [I personally was regularly subjected to this repugnant impropriety], damaging our assets, including commercial vehicles, defaming us to clients and members of staff, as well as interfering with key fob access.

[13] The Landlord was repeatedly made aware of this. In fact, we had sent him videos of myself being called a transvestite and being subjected to other deplorable slurs by the Assistant Building Manager, Clint Montessano. This was in addition to his associate attacking me and further articulating that "being Chinese was worse than being Black".

[14] As a direct consequence of the above, Komucopia [sic] reached out to the Plaintiff, advising that we wanted him to address the Owners Corporations' behaviour, as we had no direct contractual relationship with them and that only the Plaintiff had the ability to constrain their behaviour. (emphasis added)

97 Furthermore, there are two supporting creditors to the application seeking orders winding up Kornucopia, who are also landlords of properties that Kornucopia is a tenant of, and against which Kornucopia has maintained similar cross-claims.[107]

98 It was then submitted that any evidence as to other landlords not having been paid could only have come from the Searches for there was 'no evidence'. This too is incorrect. I need only refer again to the evidence of Xu which is recited above:[108]

Sifris J: Fifty cases at VCAT?

Ms Xu: Yes.

Sifris J: Is that right?

Ms Xu: Yes.

Sifris J: And are these all by landlords seeking possession of their premises?

Ms Xu: Well, um, most of them, yes.

...

Sifris J: Because of unpaid rent?

Ms Xu: Yes.

Sifris J: Is that right?

Ms Xu: Yes.

99 As for the third matter, on no view would a lay observer understand the Judge to have 'dismissed' Kornucopia's counterclaim. It is, and remains open for determination, if it indeed arises. I expressed a preliminary view that it is 'extravagant'.

100 The commentary relating the offsetting claim is based upon the following exchange with Senior Counsel for the Companies:[109]

Sifris J: What about the alleged debt over and above the statutory demand?

Mr Williams QC: It takes the same view.

Sifris J: What, that nothing's owed?

Mr Williams QC: Pardon?

Sifris J: That nothing is owed?

Mr Williams QC: Nothing is owed. And, indeed, on a proper taking...of accounts between the parties, it will be the other way

Sifris J: Why?

Mr Williams QC: Because of an offsetting claim.

Sifris J: What is the offsetting claim?

Mr Williams QC: The offsetting claim is in relation to a failure to provide quiet enjoyment.

Sifris J: Which is what? What is the nature of the...enjoyment that was...

Mr Williams QC: But it comes down to racial abuse of a director of my client being directed by Owners Corporation staff. It comes down to Owners Corporation staff being generally abusive and uncooperative. The Owners Corporation denying access to the building.

Sifris J: How does that reflect, how does that translate into a counter-claim against the plaintiff?

Mr Williams QC: Because the defendant's position is that the plaintiff has failed to cooperate as it's obliged as landlord to do in providing quiet possession with the defendant's attempts to rein in the Owners Corporation in this conduct and, indeed, by removing the Owners Corporation manager and replacing it with an Owners Corporation manager who will not engage in such conduct.

So the allegations is that it's a breach of the lease for the landlord not to cooperate in reasonable endeavours to ensure that the tenant is not being denied quiet enjoyment of the premises by the Owners Corporation manager.

Sifris J: The business model of the defendant, I take it, is to sublet the premises on Airbnb and other platforms; is that right?

Mr Williams QC: In part, yes.

Sifris J: Is there any complaint about quiet enjoyment from the sub tenants?

Mr Williams QC: Not that we know of.

Sifris J: No. And they've paid the rent?

Mr Williams QC: They paid rent to us, I assume they have.

Sifris J: So what's the loss anyway?

Mr Williams QC: Well

Sifris J: If you've received the money and you haven't handed it over, what's the relevance of quiet - it sounds like a very extravagant claim to me.

Mr Williams QC: Well, Your Honour's asking me about detail that I'm not personally across.

Sifris J: I don't want to put you on the spot but one would need to have a very specific focus on, if we get to that

Mr Williams QC: Yes.

Sifris J: We may not get to that, on what the precise cross-claim is. As I say, we're getting ahead of ourselves.

101 In other words, my impression of the claim, as articulated by Senior Counsel's vague explanation,[110] was that the claim seems 'extravagant.' Senior Counsel for the Companies provided an explanation as to the subject-matter of the claim on the matter on 24 October 2019. My dissatisfaction with that explanation was expressed in the Reasons: 'It is not apparent and has not been explained what this has to do with Chen, and indeed what the loss is, especially if Kornucopia's subtenants have continued paying rental to the company.'[111] If one were to stress the language used, the Reasons state 'It is not apparent and has not been explained'.[112] That is couched in terms which invite further explanations, evidence and submissions, in future when or if that matter comes on for determination. Furthermore, it was not necessary to deal with the cross-claim at the previous hearing, and the statement in the Reasons simply reiterated those made at the directions hearing. The Reasons note the offsetting claim would be dealt with at the next stage of the proceeding (if the proceeding reached that stage). This indicates, of course, that the claim has not been 'dismissed'.[113]

102 It is not necessary to say anything more about the offsetting claim. It is apt to repeat the passage from Hamod, cited above:[114]

The limitation of reasonableness is particularly important in deciding whether a judge's ... preliminary views of the likely outcome, indicate bias - irrespective of whether they are expressed at an early or late stage of the proceedings. Such ... expressions ought not be regarded as giving rise to a reasonable apprehension of bias unless they indicate a significant level of prejudgment in relation to matters relevant to the final determination of the proceedings ...

103 I did not wish to put Senior Counsel 'on the spot' given that he was not across the matter. Again, no criticism is intended. The view of its 'extravagance' was necessarily tentative, and expressed on 24 October 2019 and then repeated in the Reasons.[115]

104 Furthermore, the view was expressed after discussion with Senior Counsel on 24 October 2019, such that the Companies were entirely aware of what I had said. They did not make an application for my recusal at that point in time. Rather, with knowledge of that view, the Companies nonetheless proceeded to a two-day hearing on the preliminary issues the subject of the Reasons.[116]

105 Further, and by way of postscript, on 5 December 2019 (at the handing down of the result of this decision), Kornucopia confirmed that it no longer intends to bring an application under s 459S of the Act. As far as I am aware, the offsetting claim is no longer an issue that will arise for determination at the trial of this application.[117]

106 The Companies submitted (in their written submissions, but not pressed orally) that:

In his published reasons and during the hearing of 24 October 2019, Justice Sifris made references to the introduction of other grounds of insolvency, in addition to the ones that the applications of the Plaintiffs had relied upon.

107 It is not entirely clear on what basis this is said to lead to an apprehension of basis. That is, the required deviation. This matter is discussed in the Reasons in two places. The first is a footnote, in which I said:

I considered that the issues of service and non-compliance with other technical requirements might be dispositive of the case, if found in the Companies' favour. The application to wind up each company, as presently formulated, relies solely on the presumed insolvency of each Company arising out of the failure to pay or set aside the statutory demands. It may be necessary to decide whether new particulars or claims of insolvency (whether based upon evidence of insolvency, or other expired statutory demands) can be introduced by amendment, if the statutory demands or any of them are set aside (or even if they are not set aside), or whether a substitution of creditors should be permitted.

108 It had been in the contemplation of all parties that this application would proceed in stages. I cannot discern a logical or rational connection between this statement, of an entirely general quality, to any feared deviation of deciding the case on its merits.

109 Furthermore, the fact that the application proceeded in stages tends to dissuade the reasonable observer from drawing any apprehension of pre-determination. As I said, 'I considered that the issues of service and non-compliance with other technical requirements might be dispositive of the case, if found in the Companies' favour.' Were there such an apprehension of pre-determination, all issues would have been determined at the one hearing, for in the Judge's mind, the preliminary issues have been determined in favour of the plaintiffs, making it unnecessary to separate those issues.[118] The separation of threshold-type issues presupposes that the Companies had prospects of success on their case, and that it might not have been necessary to proceed to a second stage.

110 The other reference, in the Reasons, to the just and equitable ground relates only to the question (and associated general legal analysis) of whether an originating process that does not comply s 459Q of the Act is invalid. It uses an originating process which relies on the just and equitable ground, as well as presumed insolvency, as an example and point of comparison in order to aid reasoning. It deals purely with a question of law, divorced from the facts of this case. [119] The required deviation is not made out.

111 To the extent that it was referred to at the hearing of 24 October 2019, it must again be observed that it was contemplated at that time that there might have been, depending on the outcome of the hearing of preliminary issues, further amendments to the originating processes, and further stages of the case to be dealt with.

112 Matters discussed at the hearing of 24 October 2019 included what would or may occur in the event that a statutory demand was set aside for want of service; or if it was found that an originating process could, at law, be amended, where it was not compliant with s 459Q of the Act. It was raised whether, given other supporting creditors and other statutory demands issued upon the Companies, such creditors could be substituted in place of the plaintiffs in the event of either of those occurrences, or whether grounds (which did not require compliance with s 459Q) could be added to the originating process.

113 That discussion would, in turn shape the issues for determination in the case, grounds upon which the winding up is sought, and inform how it might be best to approach and determine those matters. The transcript extracts below set out, that far from encouraging the plaintiffs' expansion of the application, I was simply trying to ascertain the nature of the dispute, and the possible steps required for its resolution:[120]

Sifris J: Well, they couch it differently by saying that there hasn't been payment of the debt not the subject of the statutory demand but the increased indebtedness over and above the statutory demand as a result of recent non-payments of rental.

Mr Williams QC: Yes, but that's different.

Sifris J: Like the other two supporting creditors.

Mr Williams QC: The difficulty with that, if I might say so, this is a proceeding commenced on the basis of the presumed insolvency arising from non-compliance with the demand.

Sifris J: Is it?

Mr Williams QC: Yes.

Sifris J: Solely?

Mr Williams QC: Yes.

Sifris J: There's no allegation of insolvency apart from the demand?

Mr Williams QC: No. ...

Sifris J: Is 459P not wide enough to deal with insolvency aside from the presumption of insolvency?

Mr Williams QC: Yes, 459P is available, of course, but the only evidence that's on an insolvency is the demand and, what's more, the Act provides for the procedure that one must follow if the proceeding is brought on the basis of non-compliance with the demand, and that is the 459Q requirements which have been canvassed. So those requirements are there to deal with the very circumstance of an applicant who wishes to seek winding up based on the non-compliance with a statutory demand and that's the course which our learned friends sought to adopt. ...

...

Sifris J: ... 459P does provide for an application for a company to be wound up in insolvency.

Mr Williams QC: Yes.

Sifris J: It doesn't say whether it needs to arise out of a statutory demand or otherwise.

Mr Williams QC: No.

Sifris J: But they have in their application relied solely on the presumption arising out of the statutory demand.

Mr Williams QC: That's our point.

Sifris J: If they amended that, not to rely on the statutory demand but on insolvency more generally because of the failure to pay the debt for which there's no statutory demand, then we may enter into the genuine dispute type territory.

Mr Williams QC: Well, we might, but that would be really a quite new proceeding.

Sifris J: And that's down the track, yes.

Mr Williams QC: That wouldn't be - we would say as a matter of fairness that's not really appropriately to be achieved by amending this proceeding a second time.

Sifris J: Yes.

Mr Williams QC: To create a third originating process in that way.

Sifris J: I understand.

Mr Williams QC: That's the deal - stop and start again.

Sifris J: I understand.

...

Sifris J: Does there seem to be in many cases in VCAT?

Mr Williams QC: There are many disputes in VCAT, yes, Your Honour but one shouldn't draw from that that they're all - clearly Your Honour can see today there is a degree of cooperation going on between people who have an adverse position to my client.

Now, if there are a number of them who have banded together and all brought proceedings in VCAT, that would perhaps be unsurprising in all of the circumstances. There are a number of people with whom the same dispute exists. It's still the same dispute. The fact that there's 20 of them or 100 of them or 1,000 of them ... Or whether there are three is really neither here nor there.

Sifris J: But the broader point is if there are 100 landlords that had been kept out of their money on a sole basis of technical points and an allegation of a cross-claim of the kind that you mention, which I've called extravagant, being a preliminary view based on what you've said and I'm not holding you to it in any way, then it raises another question whether th[e] company should be wound up on the just and equitable ground as being [a] non-desirable corporate citizens.

Mr Williams QC: Well, if someone takes that view, Your Honour, then they'll bring such an application and it will be responded to.

Sifris J: Yes.

Mr Williams QC: But Your Honour can't take from the fact there being a large number of disputes in existence that ... they're all going to be determined adversely to my client.

Sifris J: I don't. I'm merely trying to look at whether there are broader issues than these three cases in order to determine how best to deal with these three.

Mr Williams QC: Yes.

Sifris J: With a view to settling a number of issues before we have, if, indeed, we do have, a flurry of further activity.

Mr Williams QC: Yes. But, I mean, dissatisfied landlords have their remedies and they have their forum. That forum is VCAT. It has exclusive jurisdiction in relation to residential tenancies.

Sifris J: But I think we are getting ahead of ourselves. You've pointed to the ability to deal with the 459Q with the matters that you've raised, the originating process and whether it's capable of or whether the permitted amendment has any effect whatsoever and having been amended whether it was done in the right way anyway.

Mr Williams QC: Yes.

Sifris J: And whether there's any in any further amendment.

Mr Williams QC: Yes.

Sifris J: And all of those matters could be dealt with as discrete matters.

Mr Williams QC: Yes.

Sifris J: Dispositive of the case.

Mr Williams QC: Quite.

114 In my view, and from the preceding discussions and the circumstances of this case, a lay observer would draw the following conclusions. As at 24 October 2019, there was a live issue relating to whether the questions of service, and non-compliance with s 459Q of the Act might be dispositive of the case, if determined in favour of the Companies. A subsidiary issue was whether, if those matters were determined in favour of the Companies, there was scope to permit an amendment (in relation to a substitution of plaintiffs). It was necessary to have all available information as to the scope of the dispute at hand, for this case has been dealt with on an urgent basis. That was the context in which those issues were raised. The lay observer would understand that the exchanges were nothing more than the ordinary procedural discussions which occur between the Bar and the Bench, necessary to determine the ambit of the case to be determined, and how this might be facilitated within a short period of time.

115 Finally, this is borne out by a ruling I gave on the following day, that is, 25 October 2019:

If the defendant succeeds in one of the preliminary issues, rendering either the statutory demand or the originating process invalid or unenforceable, for want of better words, the next stage will be whether it would be appropriate to substitute any plaintiff, and whether any amendment to the originating process would be desirable. Those matters may be preliminary matters to the eventual winding-up application. So these matters may indeed have three stages.

...

That is, for want of a better word, tranche 1 will deal with all of the preliminary matters identified yesterday and this morning, associated with the validity of the demands, originating processes and the like; depending on the result, we will move to stage 2, as I have identified, which may well be, depending on which way the ruling goes, either substitution of creditors and any application to amend, and then stage 3 being the winding-up; or, if the defendant is unsuccessful, we will move to stage 2, which will be the winding-up and the 459S application.

We will endeavour to get all of these matters done by the end of this year. The companies are entitled to know their fate, so to speak, and whether there is a basis to wind them up.

116 The Companies were not informed of the Searches prior to the publication of the Reasons. They refute the accuracy and veracity of the information produced by the Searches. They contend that they were not given the opportunity to 'refute, correct or otherwise contextualise the data.'[121] These are, in my view, matters which the Companies may raise on any application for leave to appeal from any orders which may eventually be made to give effect to the Reasons.

117 To the extent that it is necessary, given that the application was not pressed in terms of a breach of the hearing rule,[122] I do not think there was a breach of that rule that would entitle the Companies to relief with respect to the Reasons.[123] I draw this conclusion in light of Casey and SD, which are plainly distinguishable situations. In each of those cases, there was consideration of extraneous materials by a magistrate or Judge, which went to a factual issue critical to the defence of an accused (of reasonableness of force used against a child, in Casey) or the sentence imposed upon them (their risk of re-offending, in SD). In the first case, extraneous information gave rise to a distinction considered by the magistrate, not raised by the parties between 'discipline' and 'punishment' and that information was 'central to her Honour's conclusion that any use of force is unreasonable'.[124] In SD, the extraneous information led to the Judge diminishing the weight given by the appellant's expert witness, as to their risk of re-offending, which it was accepted aggravated the sentence imposed.

118 In this case, however, there are two critical distinctions. First, the extraneous information ascertained by the Searches did not go to a contentious or controversial matter or one of substance, but rather, matters of context or background. Second, consideration of those matters was not something which, on any view, could have been capable of affecting the outcome reached in the decision. I would reject, as the authorities above explain, that receipt of extraneous information (regardless of its source or content) leads to an absolute or automatic rule of disqualification.[125] Likewise, the Court of Appeal in SD did not state in absolute terms that the hearing rule would always be breached where the Judge is in receipt of extraneous information, not raised with the parties:[126]

Judges should not so inform themselves on any contentious matter, and then act upon it, without first giving the parties an opportunity to controvert or comment upon it. (emphasis added).

119 The Companies contend that various aspects of their defence to the issues of service and the like were decided or influenced or coloured by the Searches, which they had no opportunity to comment upon. However, as should be clear, the findings, the subject of which the Searches may have 'touched upon', were drawn from the evidence. The findings and inferences as to the business of the Companies, and the litigation they were engaged in, were established in evidence that was before the Court. I do not see how it could be contended that a fair-minded lay observer might reasonably apprehend that I might not have brought an impartial mind to the decision made, when those Searches, and the results of the same, could not be seen to have had a bearing on my decision. The same can be said in relation to me bearing any pre-disposition to approaching the Companies' evidence adversely, which a bystander would observe, was plainly not the case. Credit findings were not made, and the Statements are entirely neutral. More importantly, however, these matters have no effect on my ability to deal with the remaining matters in an impartial way.

120 Therefore, in my view, the application fails on the second limb of the test the cited by Riordan J in Bodycorp. The Companies are unable to establish 'the logical connection between the matter and the feared deviation from the course of deciding the case on its merits.'[127] In my view, the decision which is the subject of the Reasons was decided upon its merits, on the basis of the evidence that was before the Court. Any future hearing and determination will be on the same basis.

[1] Chen is the landlord and Kornucopia is the tenant of a property in Docklands, Victoria.

[2] Madgwicks are the former solicitors for the Companies.

[3] In the Matter of Kornucopia Pty Ltd (No 1) [2019] VSC 756 (Reasons). I will assume familiarity with the Reasons.

[4] Although I have not vacated the trial dates, it is likely that the trial will now commence in the week commencing 16 December 2019. (See paragraph [6]).

[5] I refused to grant a stay of the proceedings, pending an application for leave to appeal, and made further timetabling orders. A directions hearing is to take place on Thursday, 12 December 2019 at which time Kornucopia's materials relating to solvency should be filed, and the parties should be in a position to confirm whether they are ready to proceed to trial. I have retained the trial dates 13, 16, 19 and 20 December and indicated that the Court is able to sit 17 and 18 December, and if necessary, the week of 3 February 2020. Needless to say, this Judgment has been prepared as a matter of urgency. The urgency arises, in part, out of the requirement to determine applications for winding up in insolvency within six months (s 459R of the Act).

[8] This application was made and determined at a time (3 December 2019) Kornucopia maintained that the offsetting claim would be an issue for determination at the trial (given that it was relied upon as a subject of contended pre-determination within this application). The Company had not yet at that time filed an application under s 459S of the Act and the Court assumed that such an application would be forthcoming. . Chen submitted, at the hearing of the application, that given there was no application under s 459S, the offsetting claim was 'therefore not a live issue in the proceeding'. This decision proceeded, in the first instance, on the assumption that it was a live issue. At the handing down of the result of this application, on 5 December 2019, Kornucopia confirmed that it would not file an application under s 459S of the Act and would instead rely upon evidence of solvency. The offsetting claim, as Chen submitted, is no longer a 'live issue' and any comments made in relation to the same, are not capable of giving rise to any apprehension of pre-determination, in relation to a matter that will arise for determination. That is, subject to the proviso that the Companies intend to and are able raise this claim without the need for leave (which the Companies have not yet foreshadowed). I express no view on that matter, and if the claim is still capable of being and is raised, it will be dealt with in the usual way.

[12] Xu and Youl are officers or employees of the Companies.

[13] See Reasons [7]. This is put in a number of ways. First, it is said that I dismissed the claim as 'extravagant.' Second, by saying 'many landlords have not been paid' it is submitted that I pre-determined that the landlords' claims to be paid are legitimate, whereas Kornucopia's offsetting claim (if one exists in the relevant case) is illegitimate.

[14] [2018] VSCA 216 [79]-[80] (Maxwell P, Beach and Niall JJA) (Doughty-Cowell).

[15] Hamod v New South Wales [2011] NSWCA 375 [258]-[259] (Beazley JA) (Hamod).

[16] [1986] HCA 39; (1986) 66 ALR 239, 244 (Gibbs CJ) (Re JRL).

[17] [2000] HCA 63; (2000) 176 ALR 644, 647 [7] (Gleeson CJ, McHugh, Gummow, Hayne JJ) (Ebner).

[18] See Emanuele v Emanuel Investments Pty Ltd (1996) 21 ACSR 83, 92 (Debelle J) (Emanuele).

[19] Hamod [2011] NSWCA 375 [258]-[259] (Beazley JA) referring to Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd [2006] HCA 55; (2006) 231 ALR 663, 710 [179] (Callinan J) (Concrete).

[20] [2011] VSCA 425; (2011) 34 VR 236.

[21] Bodycorp Repairers Pty Ltd v Maisano (Recusal Appln) (No 12) [2017] VSC 676 [18] (Bodycorp).

[22] [1986] HCA 39; (1986) 66 ALR 239.

[24] [2014] WASC 494 (Le).

[26] Ibid [24]-[25], [30] and [33].

[27] [2014] WASC 494 [34] (EM Heenan J).

[28] [2015] WASC 92 (Casey).

[30] Casey [2015] WASC 92 [20] (Corboy J).

[31] [2013] VSCA 133; (2013) 39 VR 487 (SD).

[32] SD [2013] VSCA 133; (2013) 39 VR 487 [6] (Ashley, Redlich and Priest JJA).

[34] SD [2013] VSCA 133; (2013) 39 VR 487 [35]-[36], [48] (Ashley, Redlich and Priest JJA).

[35] SD [2013] VSCA 133; (2013) 39 VR 487 [49] (Ashley, Redlich and Priest JJA).

[36] (1996) 21 ACSR 83.

[37] Emanuele (1996) 21 ACSR 83, 93 (Debelle J).

[39] [1996] VicRp 20; [1996] 1 VR 320 (Rozenes).

[40] Rozenes [1996] VicRp 20; [1996] 1 VR 320, 326 (Tadgell and Callaway JJA and Crockett AJA).

[43] Save for, Casey [2015] WASC 92 and SD [2013] VSCA 133; (2013) 39 VR 487, referred to above and below. Unlike those decisions, the extraneous material has not (and could not be seen to have) been taken into account in considering the merits or substance of any issue.

[44] [1986] HCA 39; (1986) 66 ALR 239, 260-1 (Dawson J).

[45] Concrete [2006] HCA 55; (2006) 231 ALR 663, 710 [179] (Callinan J).

[46] Re JRL [1986] HCA 39; (1986) 66 ALR 239, 261 (Dawson J).

[47] See paragraphs [116]-[118].

[48] Re JRL [1986] HCA 39; (1986) 66 ALR 239, 260 (Dawson J).

[49] See paragraph [12].

[50] See paragraph [9].

[52] [2008] NSWSC 540 [53] (Brereton J) (Carbotech).

[53] Casey [2015] WASC 92 [20] (Corboy J).

[54] Le [2014] WASC 494 [27] (EM Heenan J).

[55] Casey [2015] WASC 92 [2] (Corboy J).

[56] Uncontentious is used, in the sense that the Companies' witnesses accepted those matters.

[57] It is not apparent and is indeed, difficult, to see how the result of the Searches could be used to find an inconsistency (in the sense of a rational basis for a credit finding) against the evidence of Xu and Youl. Xu clearly expressed the figure of 50 legal proceedings in the form of an estimate (after stating 'Um, I can't - can't right now, but - at Transcript of 12 November 2019, T28-9) and Youl similarly estimated 'perhaps in the region of 40 to 50' (at Transcript of 12 November 2019, T63). Neither stated the number of proceedings as a firm or certain fact, and it is not expected that they could recall that precise number from memory. Inconsistency with an estimate or guess, which by its very nature is inaccurate, could not rationally affect the witnesses' credibility. This is all the more so, in circumstances where Xu and Youl appear to have assumed in giving their evidence, that they were referring to current proceedings before VCAT. Whereas, the Searches clearly refer to past and present (or finalised and active) proceedings.

[58] (1996) 21 ACSR 83, 93 (Debelle J).

[59] See paragraph [46].

[60] Le [2014] WASC 494 [24] (EM Heenan J).

[61] Ibid [23]-[26]; Casey [2015] WASC 92 [12]-[15] (Corboy J); Rozenes [1996] VicRp 20; [1996] 1 VR 320, 322-3 (Tadgell and Callaway JJA and Crockett AJA); SD [2013] VSCA 133; (2013) 39 VR 487 [35]-[36], [49] (Ashley, Redlich and Priest JJA).

[62] Concrete [2006] HCA 55; (2006) 231 ALR 663, 710 [179] (Callinan J).

[63] [2011] NSWCA 375 [259] (Beazley JA).

[64] [1986] HCA 39; (1986) 66 ALR 239, 245 (Mason J).

[65] (1988) 12 NSWLR 358, 380-1. See also Carbotech [2008] NSWSC 540 [52] (Brereton J).

[66] [2008] NSWSC 540 [47] (Brereton J).

[69] [2000] HCA 48; (2000) 174 ALR 655, 657 [7] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ) (Johnson).

[71] For primarily this reason, it is irrelevant to this application if, as the Companies contend, the information is incorrect or inaccurate. I, of course, have not since made any attempt to verify its accuracy. Chen contended that it is verifiable by way of a litigation search conducted by a third-party information provider, such as 'Infotrack'. I express no view as to the accuracy or correctness of that submission.

[72] Johnson [2000] HCA 48; (2000) 174 ALR 655, 671 [53] (Kirby J).

[74] Reasons [7]. See evidence of Xu at Transcript of 12 November 2019, T28-9 and Youl at T63.

[76] Transcript of 12 November 2019, T28-9.

[77] Transcript of 12 November 2019, T62:23-3.

[78] Transcript of 12 November 2019, T33:5-8; 55:8-10.

[79] Transcript of 12 November 2019, T64:1-3.

[80] Further, these two facts ('busy' and 'substantial litigation') were simply two out of a larger number of facts which together led to the inference and conclusion that it was more probable than not that there had been delivery to the registered office of the Kornucopia and Efektiv statutory demands. In context, those other facts included, inter alia, that various officers were only at the registered office address sporadically; that on occasions officers other than Youl would handle mail; the ad hoc nature of the Companies' mail system; that written or computerised mail logs or records were not utilised; that various documents had or had not been delivered by post to the address; that mail was capable of being delivered to the address; that delivery was consistent with the Companies' evidence of non-receipt; and critically, that the envelopes containing the statutory demands were not returned to Madgwicks and/or Chen marked 'undeliverable' or similar, which made the competing inference contended by the Companies highly improbable (Reasons [70]-[71]). In other words, these two findings ('busy' and 'substantial litigation'), to which the Searches might have related, were merely strands within a cable, leading to the relevant finding of delivery. (See generally, Reasons [65]-[72]).

[82] Furthermore, it is of note that the Second Statement refers to substantial litigation 'in VCAT'. Were it referring to the Searches, it would encompass proceedings in other courts.

[83] Whilst making clear I did not intend to have regard to those matters, I did not wish to 'shut out' or unduly intervene or interfere in Counsel for Chen's cross-examination upon these matters. To this effect, limited cross-examination as disclosed by the transcripts, was permitted.

[84] A finding that the Companies were 'busy' had been made, however, that was made upon the direct evidence of Xu and Youl given before me, and not by reference to that VCAT decision. See paragraphs [63]-[64].

[85] [2011] VSC 321.

[87] Transcript of 12 November 2019, T27.

[88] Transcript of 12 November 2019, T30-2.

[89] Transcript of 12 November 2019, T82:12-24.

[92] Transcript of 12 November 2019, T76:22-77:7. Similar evidence as to previous times service was in issue was given by Youl: T63:4-9 and Xu: T29:21-31:6.

[93] See for instance, the evidence of Kuksal at Transcript of 12 November 2019, T78:19-79:16.

[94] See footnote 57: 'This is all the more so, in circumstances where Xu and Youl appear to have assumed in giving their evidence, that they were referring to current proceedings before VCAT. Whereas, the Searches clearly refer to past and present (or finalised and active) proceedings.'

[95] Doughty-Cowell [2018] VSCA 216 [79]-[80] (Maxwell P, Beach and Niall JJA).

[96] Hamod [2011] NSWCA 375 [258] (Beazley JA).

[97] [2000] HCA 48; (2000) 174 ALR 655, 658 [12] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ) quoting Vakuata v Kelly (1988) 13 NSWLR 502, 527 (McHugh JA).

[98] Re JRL [1986] HCA 39; (1986) 66 ALR 239, 260-1 (Dawson J); Hamod [2011] NSWCA 375 [258] (Beazley JA).

[99] Hamod [2011] NSWCA 375 [258] (Beazley JA).

[100] [2000] HCA 48; (2000) 174 ALR 655, 658-9 [13] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ).

[101] Hamod [2011] NSWCA 375 [258] (Beazley JA).

[102] See footnote 8.

[103] There is no connection (and none has been argued) between the matters or statements contended to give rise to a reasonable apprehension of bias and the issues to be determined in respect of AGV and Efektiv - that is, the subject of the abuse of process argument or s 459S application - relating to the proceeding for taxation in the Cost Court, and Madgwicks' contended lack of costs disclosure prior to their engagement by any or all of the Companies. Likewise, the number of cases is irrelevant to the solvency of Kornucopia.

[104] SD [2013] VSCA 133; (2013) 39 VR 487 [40] (Ashley, Redlich and Priest JJA) citing Concrete [2006] HCA 55; (2006) 229 CLR 577, 609-10 [111]-[112] (Kirby and Crennan JJ); R v Burrell [2007] NSWCCA 79; (2007) 175 A Crim R 21 (McClellan CJ at CL).

[105] See footnote 8. Again, given the context it should be stressed that I am not shutting Kornucopia out from bringing this claim. My understanding is that, if Kornucopia does not bring an application under s 459S, then by operation of that section, they are barred from bringing the claim.

[106] See also affidavits of Naveen Raghavan affirmed 24 July 2019 [4]-[8] (and Exhibits KC-1 and KC-2) and affirmed 8 September 2019. Furthermore, on 24 October 2019, Senior Counsel for the Companies said: 'There are many disputes in VCAT, yes...Now, if there are a number of them who have banded together and all brought proceedings in VCAT, that would perhaps be unsurprising in all of the circumstances. There are a number of people with whom the same dispute exists...' (Transcript of 24 October 2019, T33:30-34:9).

[107] The Companies' submissions state that I had: 'plainly dismiss[ed] their claims against the landlords (including Mr Jeffrey Chen and two supporting creditors) as "extravagant"'.

[108] Transcript of 12 November 2019, T28-9.

[109] Transcript of 24 October 2019, T30:9-32:6.

[110] Again, no criticism is intended.

[112] Indeed, Kuksal's affidavit of 3 December 2019 further highlights this: 'Justice Sifris further categorised his understanding of The Companies' claims against the various landlords as "extravagant."'

[113] Reasons [7]: 'Whether it can now be made is an issue to be determined after a number of technical and preliminary matters are first dealt with.' See also, Reasons [10].

[114] Hamod [2011] NSWCA 375 [258] (Beazley JA).

[115] I refer to and repeat the observations of Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ in Johnson [2000] HCA 48; (2000) 174 ALR 655 at 659 [16].

[116] The same can be said for the discussion relating to other grounds of insolvency, below. No argument was made as to whether this could be capable of constituting a waiver of the Companies' rights. I do not express a view.

[117] See footnotes 8 and 105.

[118] It can also be observed, that I had referred the parties by email through my Senior Associate, to a decision that supported the argument made by Kornucopia and which Kornucopia in fact relied upon: Deputy Commissioner of Taxation v Melking Holdings Pty Ltd (2019) 137 ACSR 411. See Transcript of 24 October 2019, T43:29-44:30.

[120] Transcript of 24 October 2019, T28:22-29:20; T32:14-33:8; 33:29-35:29.

[121] It is difficult to consider how or to what effect these matters might be contextualised. In other words, conclusions were not drawn from the information; and the information was merely stated as a fact. Contextualising or correcting a matter is only necessary where information has been relied upon to form some assumption or conclusion. With knowledge of the relevant context, that assumption or conclusion might not have been reached. However and as noted, none has been reached or stated. Further, it is not apparent and was not explained precisely what needed to be put in context and what was disputed.

[122] But rather, the 'overlap' between the hearing rule and the bias rule, and the extent to which non-disclosure of independent inquiries and extraneous information may give rise to a reasonable apprehension of pre-determination.

[123] Again, orders have not been made.

[124] Casey [2015] WASC 92 [20] (Corboy J).

[125] Emanuele (1996) 21 ACSR 83, 92 (Debelle J); Rozenes [1996] VicRp 20; [1996] 1 VR 320, 332-3 (Tadgell and Callaway JJA and Crockett AJA).

[126] SD [2013] VSCA 133; (2013) 39 VR 487 [40] (Ashley, Redlich and Priest JJA). The Court of Appeal also cited Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141, 145 at [49] in stating that their Honours were unable to reach 'the necessary affirmative conclusion that compliance with the requirements of procedural fairness "could have made no difference" to her Honour's view'.

[127] Bodycorp [2017] VSC 676 [18] (Riordan J).