Skelin v Self Care Corporation Pty Ltd

AND: SELF CARE CORPORATION PTY LTD First Respondent

SELF CARE IP HOLDINGS PTY LTD Second Respondent

GREEN FOREST INTERNATIONAL PTY LTD (and others named in the Schedule) Third Respondent

order made by: BURLEY J DATE OF ORDER: 29 JULY 2021

The application for a stay of the Federal Circuit Court proceeding SYG 2771 of 2019 in (a) of the application for leave to appeal be dismissed. 2. The applicant pay the first and second respondents' costs of the application for a stay referred to in order 1. 3. The proceeding be listed for a case management hearing at 9.30am on 8 October 2021. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT 1 INTRODUCTION [1] 1.1 Background [1] 1.2 The issues [10] 2 RELEVANT LEGAL PRINCIPLES [13] 3 THE FCCA PROCEEDING [26] 4 THE AMENDMENT APPEAL APPLICATION [30] 5 THE RECUSAL APPEAL APPLICATION [43] 5.1 The reasoning of the primary judge [44] 5.2 Consideration [57]

1.1 Background 1 These are two proceedings in which the applicant, Pascal Skelin, seeks a stay of Federal Circuit Court of Australia proceeding SYG 2771 of 2019 (FCCA proceeding). The basis for the stay applications arises from two applications for leave to appeal from decisions of the primary judge, one permitting an amendment to a pleading, the other refusing an application that the primary judge recuse herself for apprehended bias. 2 In proceedings NSD 485 of 2021 (amendment appeal application) Mr Skelin contends that the primary judge erred in permitting the applicants in the FCCA proceeding (Self Care), who are the first and second respondents in this Court, leave to file a further amended statement of claim: Self Care Corporation Pty Ltd v Green Forest International Pty Ltd (No 2) [2021] FCCA 1000 (Judge Baird) (amendment judgment). In proceedings NSD 745 of 2021 (recusal appeal application) Mr Skelin contends that the primary judge erred in dismissing his application in a case seeking orders that she recuse herself from hearing the proceedings on the basis of apprehended bias: Self Care Corporation Pty Ltd v Green Forest International Pty Ltd (No 8) [2021] FCCA 1668 (Judge Baird) (recusal judgment). 3 The applications for a stay arise against a background of some urgency having regard to the scheduled date for the commencement of the FCCA proceeding. The trial, which involves 17 respondents including Mr Skelin, is listed to take place over a period of several weeks commencing on Monday, 2 August 2021. None of the other respondents in the FCCA proceeding have joined in the stay or leave applications now advanced by Mr Skelin. 4 The procedural history of the matter in this Court may be briefly summarised. The amendment judgment was delivered on 12 May 2021. Mr Skelin filed the amendment appeal application, including an application for extension of time and leave to appeal against that decision on 27 May 2021. The extension of time application is necessary because the leave application was filed one day later than prescribed by r 35.13 of the Federal Court Rules 2011 (Cth) (FCR). Contrary to the terms of Practice Information Note APP 1: Case Management of Full Court and Appellate Matters, Mr Skelin did not notify the Federal Court registry that there was any urgency associated with the amendment appeal application until 24 June 2021. The matter was then listed for case management on 29 June 2021, and for hearing of an application for expedition of the application for leave to appeal on 30 June 2021. On that occasion Mr Skelin did not seek orders staying the FCCA proceeding (which were at that point listed for hearing on 19 July 2021), but sought expedition of the appeal while at the same time acknowledging that in the absence of a stay, even if expedition were to be granted, the appeal could not be heard before the trial had commenced. Given that no application was advanced on that occasion to stay the FCCA proceeding, the application for expedition of the amendment appeal application was stood over (by consent) until shortly after the trial was scheduled to conclude. 5 The recusal appeal application was filed in this Court on 26 July 2021. It arises from an application filed in the FCCA proceeding by Mr Skelin on 2 June 2021 which was heard on 17 June 2021. The recusal judgment was delivered on 23 July 2021. Along with the proposed grounds of appeal from the recusal judgment, the recusal appeal application was accompanied by an application for a stay of the FCCA proceeding and an application for the expedition of the recusal appeal application. 6 The two stay applications were heard on 28 July 2021. In support of both stay applications Mr Skelin relied on an affidavit sworn by Gregory Alberto Grunert, a solicitor in the employ of Taylor David Lawyers, who represent Mr Skelin. The affidavit and its annexures was some 4,000 pages in length. I was taken to none of it during the course of argument, and there was scant reference to it in written submissions. 7 Both parties supplied written submissions in advance of the hearing. 8 On 29 July 2021 I made orders which may be summarised as follows: (1) In proceedings NSD 485 of 2021 the interlocutory application filed on 6 July 2021 seeking a stay of the FCCA proceeding be dismissed. The applicant is to pay the first and second respondents' costs of the application; (2) In proceedings NSD 745 of 2021 the application for a stay of the FCCA proceeding in (a) of the application for leave to appeal be dismissed. The applicant is to pay the first and second respondents' costs of the application; (3) The applications for leave to appeal otherwise be stood over for further case management on a date to be fixed. 9 I indicated to the parties that I would subsequently deliver reasons for my decisions.

1.2 The issues 10 The two matters raised by Mr Skelin for present determination are: (1) Whether a stay should be granted pending determination of the application for leave to appeal from the amendment judgment; (2) Whether a stay should be granted pending determination of the application for leave to appeal from the recusal judgment. 11 In his originating application in the amendment appeal application Mr Skelin contends that the primary judge erred by: (1) granting leave to Self Care to file the further amended statement of claim; (2) failing to consider the further amended statement of claim in its entirety in determining the leave application; (3) granting leave to Self Care to plead causes of action that are not known to law; (4) denying Mr Skelin natural justice or procedural fairness by granting leave to file the document styled "Further Amended Statement of Claim" dated 13 May 2021 without allowing him the opportunity to consider its form and effect before it was filed; (5) denying him natural justice or procedural fairness by refusing to allow him to advance arguments concerning the totality of the document styled "proposed Further Amended Statement of Claim" and instead requiring him to advance arguments concerning individual paragraphs the subject of proposed amendment; and (6) insofar as the decision was plainly wrong. 12 In his originating application for leave to appeal from the recusal judgment Mr Skelin contends that the primary judge erred (for convenience I continue the numbering of grounds from the previous paragraph): (7) by failing to recuse herself from hearing and determining the FCCA proceeding and from further case management on the basis of apprehended bias; (8) by failing to properly apply the test and/or applying the wrong test in relation to apprehended bias; (9) by failing to give any or any proper reasons; and (10) insofar as the decision is plainly wrong.

RELEVANT LEGAL PRINCIPLES 13 The power to grant a stay is found in s 29 of the Federal Court of Australia Act 1976 (Cth) which relevantly provides: (1) Where an appeal to the Court from another court has been instituted: (a) the Court or a Judge, or a judge of that other court (not being the Federal Circuit Court or a court of summary jurisdiction), may order, on such conditions (if any) as it or he or she thinks fit, a stay of all or any proceedings under the judgment appealed from; and (b) the Court or a Judge may, by order, on such conditions (if any) as it or he or she thinks fit, suspend the operation of an injunction or other order to which the appeal, in whole or in part, relates. (2) This section does not affect the operation of any provision made by or under any other Act or by the Rules of Court for or in relation to the stay of a proceeding. 14 FCR 36.08 is titled "Stay of execution or proceedings under judgment appealed from". Rule 36.08(1) provides that: (1) An appeal does not: (a) operate as a stay of execution or a stay of any proceedings under the judgment subject to the appeal; or (b) invalidate any proceedings already taken. 15 FCR 36.08(2) permits an appellant to apply to the Court for an order to stay the execution of the proceeding until the appeal is heard and determined. 16 In Dubow v Fitness First (Australia) Pty Ltd [2010] FCA 660 Flick J summarised the principles relating to the grant of a stay on an appeal. At [21] his Honour observed that the Court retains a discretion to grant or refuse a stay, and that the usual principle is that "a successful party is entitled to the fruits of his judgment" and there must be "sound reasons" to justify a suspension of that right, citing McBride v Sandland (No 2) (1918) 25 CLR 369 (Barton J) at 374. At [22] his Honour said: Considerations relevant to the exercise of that discretion include whether there is an arguable point to be resolved on appeal and whether the balance of convenience favours the granting of a stay: Freeman v National Australia Bank Ltd [2002] FCA 427 at [4] per Spender J; Reynolds v Aluma-Lite Products Pty Ltd [2010] FCA 322 at [10] per Spender J. In Australian Competition and Consumer Commission v BMW (Australia) Ltd (No. 2) [2003] FCA 864, Finkelstein J summarised the principles which govern the exercise of the discretion as follows: [5] The principles which govern a court's discretion in granting a stay pending the determination of an appeal are well known: see generally Alexander v Cambridge Credit Corp Ltd (Receivers Appointed) (1985) 2 NSWLR 685. Although it is not possible to state exhaustively the considerations that may be taken into account in the exercise of this discretion, it is appropriate that I mention those that bear on this application. The general rule is that a stay will be granted where there is a likelihood that a successful appeal will be rendered nugatory: Wilson v Church (No.2) (1879) 12 Ch D 454, 458. A court will also consider the balance of convenience and the competing rights of the parties as well as whether either party will be prejudiced by the stay: The Marconi's Wireless Telegraph Company Limited v The Commonwealth [No3] (1913) 16 CLR 384, 386; Philip Morris (Australia) Ltd v Nixon [1999] FCA 1281 at [17]. Even though a judge will generally not be required to speculate about the appellants prospects of success, it is well established that a stay will not be granted in the absence of arguable grounds of appeal, or if the appeal is not bona fide: J C Scott Constructions v Mermaid Waters Tavern Pty Ltd (No. 1) [1983] 2 Qd R 243, 248; Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) [1985] 2 NSWLR 685, 695. It necessarily follows that a stay will not be granted if an appeal has no prospect of success: Australian Workers' Union v Pilkington (Aust) Ltd (2000) 101 FCR 35, 43. These principles were applied in Harbour City Real Estate Pty Ltd (t/as Re/Max Harbour City Real Estate) v Cargill [2008] FCA 1382 at [11] per McKerracher J. 17 While there are no express constraints on the discretion to grant leave to appeal, in general leave to appeal will only be granted if the impugned decision is attended by sufficient doubt to warrant it being reconsidered on appeal and, on the supposition that the decision is wrong, substantial injustice will result if leave were refused: Decor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 844; 33 FCR 397 (Sheppard, Burchett and Heerey JJ) at 398-400; Samsung Electronics Co Ltd v Apple Inc [2011] FCAFC 156; 217 FCR 238 (Dowsett, Foster and Yates JJ) at [26]; GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser Healthcare (UK) Limited [2013] FCAFC 150 (GSK Australia) (Allsop CJ, Middleton and Katzmann JJ) at [30]. 18 Mr Skelin submits that slightly different principles apply to applications in relation to leave to appeal against a refusal of a recusal application. He submits that if a party does not seek leave to appeal against a recusal decision, it is likely that its appeal rights are lost. He also submits that leave is far more likely to be granted to prevent a long and costly trial being wasted if the judge's decision were incorrect, citing Michael Wilson & Partners Limited v Nicholls [2011] HCA 48; 244 CLR 427 (Gummow ACJ, Hayne, Crennan and Bell JJ) at [85]-[86]. 19 In Wilson the Court considered a case of apprehended bias where the primary judge had declined to recuse himself from hearing the proceedings. The majority noted at [31] that the established test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias (in that case, in the form of prejudgment) is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide. This requires first, the identification of what it is said might lead the judge to decide a case other than on its legal and factual merits. Secondly, there must be an articulation of the logical connection between that matter and the feared deviation from the course of deciding the case on its merits: at [63]. 20 In Wilson, the respondents had twice submitted to the primary judge that he should recuse himself on the basis of a reasonable apprehension bias. These applications were rejected. The case proceeded to hearing and, after an adverse judgment was delivered, the respondents then appealed to the Court of Appeal including on the basis of the primary judge's failure to recuse himself. The Court of Appeal allowed the appeal in that regard, but that decision was overturned by the High Court. In obiter dicta remarks the High Court considered whether, by not appealing the primary judge's decision not to recuse himself earlier, the respondents were not able to pursue the issue of apprehended bias in their appeal against the final judgment given at trial. At [76] the majority noted that it is well established that a party to civil proceedings may waive an objection to a judge who would otherwise be disqualified on the ground of actual bias or reasonable apprehension of bias. If a party to civil proceedings, or the legal representative of that party, knows of the circumstances that give rise to the disqualification but acquiesces in the proceedings by not taking objection, it will likely be held that the party has waived the objection. 21 The majority then noted that in most cases a judge's refusal of an application that the judge not try, or continue to try, a case on account of reasonable apprehension of bias will constitute a final determination by the judge that the facts and circumstances relied on by the applicant do not establish the relevant apprehension. In such a case, it may be that an applicant who does not seek to challenge the refusal by then seeking leave to appeal should be held to have given up the point: at [79]. The question of whether or not that occurred will depend on the facts of the case and depends on whether or not the failure to appeal the decision was reasonable: at [84]. 22 In the present case Mr Skelin has sought leave to appeal. Regardless of the outcome of the present stay application, it is doubtful that he will be precluded from raising the recusal ground on appeal following any final judgment in the FCCA proceeding. 23 In Wilson the majority said at [86] (emphasis added, citations omitted): … It is, however, important to add, contrary to what was said in the Court of Appeal, that an application for leave to appeal against the rejection of an application that a judge not hear a matter due to apprehended bias may well be a case where the usual criteria would require leave to be granted, at least if a long and costly trial would be wasted if the judge's decision were incorrect. 24 Contrary to the submission advanced by Mr Skelin, I do not understand this to mean that leave is "far more likely to be granted" to prevent a long and costly trial being wasted. As the Full Court noted in GSK Australia at [31], the observation at [86] of Wilson "assumes that there is some doubt about the judge's decision. It may be accepted that substantial injustice would result if leave were refused and the decision below is wrong. The real question is whether there is sufficient doubt as to the correctness of the decision to justify a grant of leave". 25 During the course of submissions Mr Skelin suggested that it might not have been appropriate for the primary judge to consider the recusal application, and that her Honour's reasons were irrelevant to the consideration of the merits of the appeal. In this regard, I note the following passage in GSK Australia at [33]: … It is well established that it is for the judge assigned to hear the matter to decide whether he or she should withdraw for apprehended bias. The test formulated by the High Court assumes that, in the first instance, it will be applied by the judge concerned: Dr Melissa A Perry, Disqualification of Judges: Practice and Procedure, Discussion Paper (Australian Institute of Judicial Administration, 2001) at [2.39]. As the plurality observed in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [74], "the ordinary, and the correct, practice" is for the judge to decide the matter for himself (or herself, as the case may be).

THE FCCA PROCEEDING 26 The primary judge provides a summary of the proceedings in several of the decisions that she has made. The following details are set out in Self Care Corporation Pty Ltd v Green Forest International Pty Ltd [2021] FCCA 129 (Judge Baird) and provide a broad overview. 27 The first applicant in the FCCA proceeding (the first respondent in these proceedings), Self Care Corporation Pty Ltd, is a personal care consumer product company that develops, distributes and markets cosmeceutical skincare products many of which are distributed and sold under the primary brand "freezeframe". The second applicant (the second respondent in these proceedings), Self Care IP Holdings Pty Ltd, is the intellectual property holding company for certain trade marks relating to the business of the first respondent, and the licensor of certain trade marks to the first respondent. Self Care alleges that more than 30 products are marketed under the "freezeframe" primary brand; the freezeframe products are manufactured and packaged in Australia, distributed, offered for sale and sold in Australia via mainstream pharmacies and online, and exported for sale through authorised distributors. Since 2010, freezeframe products have been distributed by or on behalf of Self Care outside Australia, including in China, Hong Kong, Singapore and the United Kingdom. 28 The primary judge stated that broadly speaking, and non-exhaustively, the FCCA proceeding concerns allegations by Self Care against 17 respondents (comprising bodies corporate and individuals) variously of infringements of Self Care's intellectual property rights (trade mark and copyright) in relation to freezeframe products, authorisation of such infringements, passing off, breaches of confidence, breaches of fiduciary duties, and/or by certain alleged conduct engaging in misleading and deceptive conduct under s 18 of the Australian Consumer Law (which is schedule 2 to the Competition and Consumer Act 2010 (Cth)), being party to a common design, being involved in, and being knowingly concerned in, and liable for, various of such activities. That alleged conduct comprises one or more of: (a) the manufacture, distribution, marketing, sale and/or supply of counterfeits of freezeframe products in Australia and/or in China; (b) the purchase for resale, sale, supply and distribution of possibly genuine freezeframe products in Australia and/or in China inconsistently with the rights and/or limitations on rights of distribution granted by Self Care, and/or in breach of an agency agreement; and (c) conduct relating to registrations for freezeframe products with the Chinese Food and Drug Administration. 29 Self Care alleges, inter alia, that the 17 bodies corporate and individuals identified as respondents are involved variously in the supply and arrangements for the supply of cosmetics and other personal care products (including freezeframe products and counterfeit freezeframe products) in Australia and/or China. They contend that in about October 2016 it appointed one of the respondents (EPAQ International) as its non-exclusive agent and that until about April 2019 Self Care supplied freezeframe products to EPAQ and another respondent, Freeze Frame China. They allege that in early 2019 the relationship between those companies (and other respondents) broke down. Self Care alleges that counterfeit versions of the freezeframe products were being sold and distributed in Australia and China, and also re-exported from Australia to China, and that freezeframe products designated for China have been re-exported for covert resale in Australia. Self Care seeks declaratory, and injunctive relief, and pecuniary relief, including by way of compensatory damages, or an account of profits, additional damages, and, as against certain respondents equitable damages or compensation.

THE AMENDMENT APPEAL APPLICATION 30 I commence by considering the stay application arising from the amendment judgment. 31 The decision of the primary judge was one concerning practice and procedure, in circumstances where her Honour has case managed the proceedings since 2019. The FCCA proceeding involves numerous parties and her Honour has given a number of judgments during the management of the proceedings. In the amendment judgment the primary judge summarised the categories of amendments proposed to be made to the statement of claim in [45] of her reasons, and summarised the objections raised by Mr Skelin and the Green Forest parties at [47]. She then referred to the relevant legal principles to be applied in an application to amend a pleading, and addressed in some detail the legal principles relevant to liability for common design, personal liability and negligent misstatement (at [65]-[80]). No specific issue is taken on appeal with these statements. Her Honour then considered the parties' positions generally before considering the particular paragraphs to which objection was taken. 32 In ground (1) of both his application for leave to appeal the amendment judgment and his draft Notice of Appeal Mr Skelin contends generally that the primary judge erred by granting leave to amend. The particulars appended to that ground do not elucidate how that error is said to arise. In oral and written submissions advanced at the hearing of the stay application, he appears to seek to re-run the points apparently advanced before the primary judge. He does not point to specific errors in the primary judge's reasoning but rather makes broad points of complaint about the pleading. 33 Mr Skelin identifies as one alleged fault in the pleading, which permeates a number of paragraphs, the usage by the pleader of the words "and/or" which he submits gives rise to a "speculative" pleading. One instance is in paragraph 38Bc where the pleading states: Ivan Wang, his assistant Luo Xinzhen and Liao (Sean) Zhiang were associates of, and acted under the direction of, Skelin and/or Emilio Wang... 34 The use of "and/or" here serves to abbreviate the possibilities that Mr Skelin alone, Mr Wang alone or both Mr Skelin and Mr Wang were associates of and gave direction to the named persons. Each could have been pleaded out separately. The primary judge did not find the particulars to lack clarity. It is not apparent that she erred in so finding. 35 Mr Skelin submits that the "main deficiency" in the pleading arises from allegations that Mr Skelin is the agent of a particular company as well as liable personally for conduct that he undertook as a director or other agent of the company. He submits that this pleading is wrong in law, citing Yorke v Lucas [1985] HCA 65; 158 CLR 661 (Mason ACJ, Wilson, Deane and Dawson JJ) at [18]. To the extent that the criticism advanced is that the pleaded case cannot be correct in law, then Mr Skelin is free to make that argument in submissions at the trial. If the primary judge errs in the application of the law, Mr Skelin will be free to raise the point on final appeal. 36 Mr Skelin next submits that there are insufficient material facts pleaded in support of the allegations of personal liability. For example, the primary judge considered the point and concluded at [203] that paragraphs 59, 60 and 60A of the amended pleading together set out sufficient information as to what he is alleged to have done, either on his own behalf or on behalf of named companies. To the extent that Self Care advances a case that strays beyond the matters pleaded or the particulars provided, he will be in a position to object at trial. To the extent that he contends that there is error in permitting a submission to be advanced because it goes beyond the pleaded case, that is a submission that he can make at trial and in any appeal. 37 Mr Skelin advanced no argument in support of grounds (2) or (6). 38 In relation to ground (3), Mr Skelin contends that the pleaded case pleads numerous causes of action "not known to law". Although perhaps inconvenient to do so, Mr Skelin will be free to make that submission at the trial. He suffers no substantial prejudice in being required to do so and he will be able to raise the point on any appeal. 39 In grounds (4) and (5) Mr Skelin contends that the primary judge failed to afford him natural justice or procedural fairness. This is said to have arisen from [233] of the amendment judgment where the primary judge granted leave to Self Care to amend their statement of claim "and to file and serve a pleading substantially in the form of the draft...incorporating the further amendments allowed and those foreshadowed by the Court in these reasons". He submits that the denial of procedural fairness arises because the grant of leave was prospective and that he was given no opportunity to review or oppose the final form of the further amended statement of claim prior to it being filed. The difficulty with this submission is that nowhere has Mr Skelin identified any respect in which the filed form of further amended statement of claim deviated from the leave granted in [233] by incorporating amendments not allowed by the Court. Furthermore, had Self Care deviated from the leave, that is a matter that Mr Skelin could have taken up with the primary judge. 40 The foregoing matters must be considered in the context of the relative inconvenience of granting the stay sought in the amendment appeal. In this regard I note the following points: (1) The amendments the subject of present application form a sub-set of the case advanced against Mr Skelin in the context of proceedings where there are 16 other respondents who are apparently ready to proceed with the hearing; (2) Since the amendment judgment was delivered, Mr Skelin has filed a defence to the further amended statement of claim; (3) Mr Skelin has also filed evidence in support of his defence. He has not sought leave to supplement his affidavit evidence in response to the amendments. No affidavit evidence filed in support of the stay application contends that Mr Skelin has been unable to meet the case advanced in the further amended statement of claim or that he has been unable to address the points made against him; (4) The trial is listed to commence imminently. Mr Skelin is one of 17 respondents. All but one of the remaining respondents actively taking part in the FCCA proceeding are represented by counsel; the first, second, fifteenth and seventeenth respondents are represented by senior and junior counsel, the ninth and fourteenth by junior counsel and the sixteenth respondent by junior counsel. The thirteenth respondent represents herself. There will be very considerable inconvenience should a stay be granted pending consideration of the question of leave to appeal. None of the other respondents have supported the application for the stay; (5) Mr Skelin has made no offer to pay any costs thrown away by reason of any stay to any of the other respondents. He is an undischarged bankrupt and accordingly is in no position to meet any of their costs; (6) In his submissions in reply Mr Skelin offered an undertaking from his wife (the owner of real estate in Vaucluse) to pay Self Care's costs in the amendment appeal application and the recusal appeal application in respect of the stay applications and also, in the event that he is unsuccessful in his appeals, the costs thrown away by reason of the adjournment of the hearing in the FCCA proceeding. However, I was not taken in submissions to any evidence as to the current unencumbered value of the property (which is the subject of a freezing order in the FCCA proceeding) or any evidence of other property or liabilities of Mrs Skelin. The undertaking does not extend to the costs of the other respondents; (7) There has, as I have noted in [4] above been some delay associated with the bringing of the present application for leave, during which time the parties have proceeded to prepare for the hearing in the FCCA proceeding. This is not a factor in favour of Mr Skelin; (8) The consequence of refusing a stay will not render any appeal nugatory. As I have noted, Mr Skelin may make submissions at trial where a case put by Self Care has not been adequately pleaded and may advance submissions where the pleaded case does not give rise to a cause of action recognised in law. Should those submissions wrongly be rejected, Mr Skelin will have the opportunity to appeal the final judgment. 41 Having regard to these matters, I am not satisfied that in all of the circumstances Mr Skelin has established that it is appropriate to make an order that the FCCA proceeding be stayed pending determination of the application for leave to appeal from the amendment judgment. 42 Accordingly the application for a stay pending determination of the application for leave to appeal from the amendment judgment should be dismissed with costs.

THE RECUSAL APPEAL APPLICATION 43 The application for recusal was brought by way of application in a case filed by Mr Skelin on 2 June 2021, following a decision by the primary judge refusing applications made by Mr Skelin and the first and second respondents in the FCCA proceeding to transfer the FCCA proceeding to the Federal Court: Self Care Corporation Pty Ltd v Green Forest Pty Ltd (No 3) [2021] FCCA 1277.

5.1 The reasoning of the primary judge 44 The primary judge records in her reasons that no particulars accompanied the application, but an affidavit of Mr Grunert, accompanied by an exhibit totalling some 2,700 pages was filed, though the affidavit did not identify any grounds of apprehended bias or direct attention to any particular evidence. The primary judge required that Mr Skelin file particulars of the grounds upon which the recusal application was based, which were subsequently provided in two documents. 45 In argument in this Court Mr Skelin summarises the case that he put to the primary judge in relation to apprehended bias. He submits that on 17 and 18 December 2019 the primary judge heard argument in relation to an application for freezing orders against him. During those hearings he submits that the primary judge made a number of statements which disclose that the primary judge was actively persuaded that the serious allegations against Mr Skelin being the mastermind of a fraudulent scheme involving the manufacture of counterfeit products was made out. That persuasion was manifested, he submits, in both the language used by the primary judge and in the scope of the freezing order made, which extended beyond Mr Skelin's property to include the house that his wife had owned for 17 years, in circumstances where she was not a party and in the absence of any evidence justifying an order. The primary judge delivered no reasons in relation to the freezing order, and so it is necessary, he submits, to consider the transcript and the orders. Mr Skelin submits that in concluding that the freezing orders were appropriate, the primary judge accepted Self Care's submissions that Mr Skelin had conducted himself as Self Care alleged. 46 The primary judge summarised these submissions in the recusal judgment at [26] and then set out the procedural context leading up to Mr Skelin's application. This involved prior ex parte orders made on 25 October 2019 against the first to sixth respondents, including Mr Skelin, restraining them from dealing in freezeframe products the subject of the proceedings until further order. The matter was then returned for case management on 31 October 2019 when counsel appeared for the fourth respondent and also Mr Skelin. Counsel agreed to certain orders that included the requirement that Mr Skelin deliver up certain records. Counsel and solicitors representing Mr Skelin subsequently made various applications and attended court on his behalf including on several separate occasions in November and early December 2019. 47 On 17 December 2019 three applications in a case filed by Self Care were returnable: one for contempt by three respondents (not including Mr Skelin), another for freezing orders against five respondents, including Mr Skelin, and a final one concerning a trade mark and domain name applications. Mr Skelin was represented by solicitors and counsel. On the evening of 17 December 2019 the primary judge made the freezing orders and the matter was returned for further hearing on 18 December 2019. The primary judge notes that no application to vary or discharge the freezing orders was then or has since been made by Mr Skelin. 48 In her reasons the primary judge summarises the principles relevant to consideration of the application that she recuse herself from the proceedings on the basis of apprehended bias. Mr Skelin makes no submission that the principles so cited are inaccurate. The primary judge considered the identity of the hypothetical observer. She noted that in Johnson v Johnson [2000] HCA 48; 201 CLR 488, the plurality (Gleeson CJ, Gaudron, McHugh, Gummow, and Hayne JJ) said at [13]: Whilst the fictional observer, by reference to whom the test is formulated, is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice. The rules and conventions governing such practice are not frozen in time. They develop to take account of the exigencies of modern litigation. At the trial level, modern judges, responding to a need for more active case management, intervene in the conduct of cases to an extent that may surprise a person who came to court expecting a judge to remain, until the moment of pronouncement of judgment, as inscrutable as the Sphinx… 49 The primary judge noted, citing GetSwift Limited v Webb [2021] FCAFC 26; (2021) 388 ALR 75 (Middleton, McKerracher and Jagot JJ) at [34]-[35] that the hypothetical lay observer would, before forming a view about the existence of a reasonable apprehension of bias, be informed of the nature of the decision, the context in which it is made and the circumstances leading up to it and setting aside irrelevant and immaterial matters. She also noted that in GetSwift the Full Court said at [65] that there is a need on the part of an applicant for recusal to firmly establish a reasonable basis for thinking that the decision maker "might be so committed to a conclusion as to be incapable of persuasion to a different view". After extensively reviewing particular illustrative case examples relied upon by Mr Skelin in submissions, the primary judge turned to the grounds advanced. 50 In support of ground 1, which was to the effect that in making the freezing orders the primary judge accepted Self Care's submissions that Mr Skelin had conducted himself as Self Care had alleged, the primary judge referred to specific passages in the transcript relied upon by Mr Skelin, which are set out in annexure 3 to the primary judge's reasons. The primary judge noted that Mr Skelin relies on comments made within 16 pages out of the 179 pages of transcript taken on 17 and 18 December 2019 and that he characterises certain observations made by the primary judge in that transcript as "findings", which the primary judge then set out at [71]. The primary judge noted that a number of these were not the subject of the particulars provided, but that all transcript passages, together with surrounding transcript are set out in annexure 4 to the primary judges' reasons. That is a document of some 25 pages in length. 51 The primary judge scrutinised the passages relied upon by Mr Skelin in support of his recusal application in some detail over paragraphs [79]-[106] of her reasons. 52 The primary judge then noted that Self Care had submitted that the application should be dismissed because Mr Skelin had waived his right to seek recusal in circumstances where he had appeared before the court after the freezing order was made, he made no application to vary those orders or appeal from them, he had participated in the proceedings since then and there was no explanation from Mr Skelin as to why he had not sought to raise the question of apprehended bias until 18 months after the events complained of, citing Wilson at [72]-[85]. 53 The primary judge declined to determine the application on the basis of waiver, but looked to the substance of the allegations of apprehended bias. She recorded at [119] that she had read the transcript of the hearing of the freezing order application and the passages emphasised in Mr Skelin's submissions "with knowledge of the circumstances leading to the hearing and the making of the [f]reezing [o]rders". 54 The primary judge then said (original emphasis): [120] I consider that the hypothetical observer would be aware that the 25 October 2019 orders were interlocutory in nature. The hypothetical observer would be taken to know that Mr Skelin had told the Court (on 31 October 2019) he did not intend to argue against them during the interlocutory course of the proceeding, but that that did not mean he would not defend the matter and argue the matter fully at final hearing, with the benefit of evidence about his case. The hypothetical observer would know that judges - such as myself - are capable of impartially reconsidering matters which have previously been considered, including in this proceeding the evidence put before me in the 25 October 2019 hearing, and the interlocutory hearings in the seven weeks before 17 December 2019. [121] The hypothetical observer would be aware that the 17 December 2019 hearing took place in the context that the applicants had obtained and looked at documents produced by Mr Skelin, but that the proceeding was still at a preliminary stage. The hypothetical observer would know that the applicants had yet to put on a statement of claim, and that Mr Skelin had yet to say what his response was, and put on his defence. The hypothetical observer would assume that these steps would occur. They would note that Mr Skelin said he intended to defend the proceeding, and that I accepted that expressed intention. [122] The hypothetical observer would be aware that the judge was told before embarking on the detail of the hearing that the orders the applicants sought on 17 December 2019 were interim, and that the judge had made it plain that anything she did was to tide the proceeding over the Christmas break and that she was available on and from 10 January 2020 - when everyone had an opportunity to consider the matter and put on evidence and she could consider the application with the benefit of all the parties' evidence and full argument. The hypothetical observer would reasonably apprehend that what followed in the course of the hearing was to be viewed through that lens - that orders were sought to preserve the assets position over the Christmas break. The Court approached the application as interlocutory, interim and open to review. As observed in Johnson by Kirby J at [53], the hypothetical observer must be taken to have some knowledge of the fact that an adjudicator may properly adopt reasonable efforts to confine proceedings to appropriate limits and to ensure that time is not wasted. 55 The primary judge rejected the contention that the hypothetical observer would reasonably consider that she had formed a clear or concluded view that Mr Skelin was dealing in counterfeit product, noting that it was not necessary for her to so find for the purposes of the application and that she made no findings of fact or with respect to credit. The primary judge concluded that the transcript shows that at most she was satisfied that Self Care had demonstrated a sufficient case for the purpose of making interlocutory freezing orders, noting also that the hypothetical observer would also observe that the primary judge had acknowledged that Mr Skelin intended to defend the proceeding, and that he would file a substantial affidavit (as proffered by his counsel) and that he was intending to fully participate in the proceedings. 56 The primary judge noted that ground 2 of Mr Skelin's application as advanced before her was that her conduct in the management of the proceedings over the course of 18 months since the making of the freezing orders "reinforced" the apprehension of bias which arose from the conduct in ground 1. Having concluded that ground 1 was not made out, the primary judge did not consider it necessary to address ground 2, but nevertheless did so in [137]-[158] of her reasons. She concluded that ground 2 was also not made out.

5.2 Consideration 57 In his submissions on the stay application Mr Skelin identifies 8 short passages taken from the transcript of argument on 17 December 2019. He contends, as he did before the primary judge, that these remarks recorded the primary judge's actual persuasion that the documentation relied upon by Self Care in support of the application for freezing orders proved that he had been dealing in counterfeit products and the charge of dishonest conduct had been established. He submits that the freezing order made against property owned by Mrs Skelin was an error, and the primary judge never articulated the basis upon which she considered that such order should have been made. 58 It is not appropriate in the present application for a concluded view to be expressed as to the merits of the proposed appeal from the recusal judgment. I have considered each of the passages the subject of the submissions made by Mr Skelin in the context of the passages as they appear in the transcript more generally. It is apparent that the exchanges that took place between the primary judge and counsel were fairly typical of the dialogue that might be expected in an interlocutory application. 59 One example is at transcript page 138 lines 29 to 44. There the primary judge expresses "concern" as to the apparent conduct or intentions of Mr Skelin as reflected in a document that he had produced. There was a debate between the primary judge and counsel for Mr Skelin about how document might be understood. The impugned aspect of the discussion is that the primary judge indicated that the contents of the document "cause, with respect, considerable concern". Given that the primary judge was required to adjudicate on whether or not to grant interim relief in the nature of a freezing order, it was necessary for her to evaluate the case advanced by Self Care. She debated aspects of that evaluation at some length in exchanges with counsel. However, it is not apparent that in expressing concern, the primary judge was expressing a concluded view such that she might not bring an impartial and unprejudiced mind to the resolution of the question on final hearing. It does not seem likely that the hypothetical observer would have formed that view. 60 Similar observations may be made of the other passages relied upon, once they are placed in the larger context of the dialogue between the primary judge and counsel. Indeed, the primary judge often qualified her remarks, observing: (a) in one passage (which has been singled out for criticism) that an aspect of the evidence before her "suggested" certain content; (b) noting that Self Care had yet to plead its case before there could be any final relief and that the primary judge had "a quia timet concern" - clearly indicating the nature of the application and the primary judge's consideration of it; (c) noting that there may be other explanations for conduct that are yet to emerge; (d) these observations are consistent with the way that Self Care advanced its submissions, as being based on "serious apprehensions" as to what might take place if a freezing order is not made; and (e) responding to the statement by counsel for Mr Skelin that it was his intention is to defend the matter, by saying that she assumed that this was the case. 61 In concluding that it is not appropriate to grant a stay on the basis of the application for leave to appeal from the recusal judgment I take into account the merits of the proposed appeal which, upon the basis of the materials presented, would appear to be poor. I also have regard to the fact that by applying for leave to appeal Mr Skelin has in effect preserved his position should he chose to appeal from the final judgment of the primary judge on the basis of apprehended bias: Wilson at [75]-[84]. Accordingly, a successful appeal after judgment is not likely to be rendered nugatory. This gives rise to consideration of the balance of convenience and the competing rights of the parties. In this regard, the points that I have noted in (1) to (7) of [40] above are relevant. Although it is true that the consequence of a successful appeal may be that the hearing is declared to be a mistrial, if a stay is granted the efforts of the parties to prepare for the hearing will be wasted. Finally, it may be noted that the recusal application was brought on the eve of the trial, some 18 months after the conduct that is the subject of direct criticism. Neither in his submissions nor in the affidavit of Mr Grunert has Mr Skelin offered any explanation for this apparent delay. In the exercise of my discretion this does not weigh in favour of Mr Skelin. 62 Having regard to these matters in my view the application for a stay on the basis of the application for leave to appeal from the recusal judgment must be dismissed with costs. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Burley.

SCHEDULE OF PARTIES NSD 485 of 2021

NSD 745 of 2021 Respondents Fourth Respondent: YAOAN (ERIC) CHEN Fifth Respondent: YILIN TRADING PTY LTD Sixth Respondent: FREEZEFRAME CHINA CO PTY LTD (IN LIQUIDATION) Seventh Respondent: KEFEI (EMILIO) WANG Eighth Respondent: EPAQ INTERNATIONAL PTY LTD Ninth Respondent: QUANJIAN PTY LTD Tenth Respondent: YIPING YANG Eleventh Respondent: TAOYU PAN Twelfth Respondent: KEFEI (IVAN) WANG Thirteenth Respondent: ZUREN INTERNATIONAL PTY LTD Fourteenth Respondent: SIQI HUO Fifteenth Respondent: YULIN WANG Sixteenth Respondent: E-GO CHANNEL PTY LTD Seventeenth Respondent: AUSTRALIAN VITAMIN PLUS PTY LTD Eighteenth Respondent: YAN (CYNTHIA) LI