CONSIDERATION
28 Ms Zhai's arguments should be rejected.
29 First, the test in Ebner 205 CLR at 344-345 [6]-[8] did not apply solely to cases in which the judge might have had a financial interest. The High Court propounded a test of general application, as is evident from its subsequent consideration by appellate and other courts, including in the passage we have cited above from Laurie 242 CLR at 311-312 [139]-[14].
30 Secondly, Ms Zhai made no complaint when the application to plead fraud was first raised, argued and determined. Indeed, no such complaint was open then, as it is not now. It is not appropriate to raise, after the event, a complaint that the primary judge should not have heard an application but should have referred it to another judge: Vakauta v Kelly (1989) 167 CLR 568 at 572 per Brennan, Deane and Gaudron JJ. For the same reasons as their Honours explained, in our opinion the primary judge should have been asked to consider an application for him to refer the matter to another judge before Ms Zhai, without objection, allowed him to embark on the hearing now complained of.
31 It is also significant that Ms Zhai did not ask the primary judge to refer either of the interlocutory applications to another judge to be heard after allegations of fraud were first raised. She took the risk that he would consider those allegations in the interlocutory proceeding and it was some time after the freezing order decision, made on 27 November 2014, that she made the application for recusal. Whether it was made orally or in writing, Ms Zhai has been unable to say (no application is in the appeal book), but it was not made before 18 December 2014, being the date on which she filed written submissions seeking his Honour's recusal. By that time, his Honour had given reasons for making the freezing order against Ms Zhai. The fact that no such application was made before that time is consistent with a reasonable lay observer, who was properly informed as to the nature of interlocutory proceedings, understanding that the judge could make interlocutory findings of a provisional nature without those findings having any effect on his final conclusions as to credibility of witnesses in the main proceedings.
32 Thirdly, an urgent interlocutory hearing for freezing orders, whether pursued before, during or after a trial, necessarily invites the judge to form and express some view as to whether the applicant for the relief has established, on the interlocutory material, a sufficiently arguable case that there is a risk of dissipation of assets. Ordinarily, any such view will only be an interlocutory one arrived at on the basis of affidavit evidence led on the relevant application. This was not a case like Livesey v New South Wales Bar Association (1983) 151 CLR 288 which held that a fair minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of later proceedings in circumstances where the judge had previously found a state of affairs to exist or come to a clear view about a witness' credit. There had been no such occurrence in this instance. Here, a fair minded lay observer would expect that, after hearing or receiving final submissions at the conclusion of the trial, the judge might well have formed some view on the credit of witnesses whom he had seen give oral evidence. But that cannot be equated to a perception of pre-judgment of the outcome of the trial by the judge. His Honour had not prejudged the trial; he had heard the trial and his task was to decide it on a final basis.
33 Ms Zhai's complaint about his Honour's observations in Luo (No 1) [2014] FCA 1296 at [7] that he had seen both Ms Zhai and Mr Luo in the witness box and that Mr Luo's solicitor had become suspicious of her, has no substance. We see no error in the way in which the primary judge correctly addressed those complaints on the subsequent recusal decision (Luo (No 4) [2015] FCA 32 at [13]-[14]).
34 Ms Zhai did not argue that the determination of an application for a freezing order prior to the trial, which relied upon evidence that might turn on likely or possible dissipation of assets, could be distinguished from a situation where the trial judge had been asked to consider such an application after the trial but before delivery of final reasons for judgment. It is very likely that after a judge has heard the trial, he or she will have formed some view about the witnesses' credit.
35 We do not consider that the hearing of the application to amend the pleading, even to add the claim of fraud, with or without an application for a freezing order, could have created in the circumstances of these proceedings a reasonable apprehension of bias. The mere fact that one adversary raises pejorative allegations against another in litigation does not make, and could not possibly alone allow, a fair minded lay observer to contemplate that a judge might think that the making of those allegations in some way reflected upon the credit of the person attacked. The informed fair minded lay observer must be taken to have knowledge that the judge who is hearing the matter is a professional judge and that judges hear cases involving all manner of allegations by one party against another all the time. The task of the judge is to determine whether the allegations have been established on the evidence. The fair minded observer would know that the judge hears the case and decides, on the evidence, whether an allegation has been proved and the judge will not be influenced merely because the allegation was made: Laurie 242 CLR at 311-312 [139]-[140].
36 The primary judge carefully assessed the arguments that Ms Zhai advanced and correctly rejected them. Nothing in his Honour's several interlocutory reasons or hearings exhibited what reasonably might be apprehended as any predisposition to an outcome of the substantive case or the possibility of unfairness. The informed lay observer would appreciate the context in which his Honour's passing reference to the opportunity he had had to observe the witnesses at trial was expressed after the trial and his receipt of final submissions and that, even at that stage, he did not express a view on the trial evidence.
37 The informed lay observer would be aware that professional judges hear questions that arise in the course of proceedings in which they are required to consider evidence and other material. Those questions can involve allegations, evidence, material or argument that may be prejudicial to, or critical of, a party or a witness. This observer would also be aware that, whether or not the same allegation, evidence, material or argument is before him or her in the substantive proceedings, which the judge has yet to decide, he or she will put that matter out of his or her consideration when making a decision of a final nature on the evidence and submissions relevant to that decision.
38 Judges reject pejorative matter tendered as evidence routinely and hear submissions about allegations, evidence or arguments that are couched in robust, pejorative language. But, the lay observer must be credited with the common sense of being aware that a professional judge will put out of his or her mind the matter that is not legally open to be considered by him or her in deciding the substantive case: Laurie 242 CLR at 311-312 [139]-[140].
39 If this were not so, a party could assert that, merely because the judge had seen or heard, but rejected, inadmissible but highly prejudicial material as evidence in the case at hand, he or she thereupon was disqualified from continuing to hear the case. The lay observer would appreciate that a professional judge, unlike a lay person, must be able to ignore such material or pejorative allegations because the very responsibility of having to see the material or allegation in order to rule on its admissibility or correctness requires the judge to be trusted to ignore what is not admitted into evidence or relevant to his or her carrying out of the judicial task that the judge is then in the course of performing.
40 Here, Ms Zhai's argument amounts to the proposition that the fair minded lay observer might reasonably consider that the judge might be influenced in arriving at his decision in the substantive proceedings by not considering only the evidence and submissions that were relevant, but rather by extraneous factors that were before him in one or two interlocutory applications. In our opinion, there is no reasonable possibility that the informed fair minded lay observer might reasonably have formed a view that the primary judge might have prejudged, or not been impartial in his consideration of, the result of the final hearing in the circumstances of this case. The fair minded lay observer would have expected, we would interpolate, correctly, that, as a professional judge, his Honour would put out of his mind what he had heard or said on the interlocutory applications when he later came to decide the substantive case on which he had previously reserved his final decision.