Background
The New South Wales Independent Commission Against Corruption filed a creditor’s petition seeking sequestration of Martin Otto Waterhouse’s estate, relying on unpaid costs orders from earlier proceedings in the Supreme Court of New South Wales and the New South Wales Court of Appeal. Waterhouse, appearing without counsel, subsequently applied for every Federal Court judge to be recused for apprehended bias and sought the appointment of an outside judicial officer to hear the matter.
During case management, Markovic J raised whether Waterhouse’s interlocutory application should be removed from the Court file under r 2.28 of the Federal Court Rules 2011 (Cth) and invited submissions from both parties. After the Chief Justice referred that question to a Full Court, Waterhouse sought the recusal of Markovic, Colvin and McElwaine JJ. He alleged that Markovic J’s case-management decisions demonstrated actual or apprehended bias and that all Federal Court judges had an interest in concealing alleged corruption within the judiciary and government.
The Court’s Holding
Each member of the Full Court refused to recuse. Markovic J held that there was no evidence of prejudgment or of the alleged conspiracy involving her and the Chief Justice. Raising r 2.28, obtaining submissions and arranging a hearing were ordinary exercises of the Court’s case-management powers and did not show that her mind was closed or provide a logical basis for apprehending that she would decide the matter otherwise than on its merits.
Colvin and McElwaine JJ likewise found no particularised or coherent foundation for apprehended bias against themselves or the Court generally. General allegations of systemic judicial corruption, unsupported by evidence or a rational connection to the issues before the Full Court, did not satisfy the established test for apprehended bias. These reasons determined only the judges’ recusal; they did not decide whether Waterhouse’s interlocutory application should ultimately be removed from the Court file or resolve ICAC’s creditor’s petition.
Key Takeaways
- Actual bias based on prejudgment must be distinctly alleged and clearly proved; procedural steps and tentative consideration of an issue do not by themselves establish a closed mind.
- Apprehended bias requires identification of a specific matter that might affect impartiality and a logical connection between that matter and the feared departure from deciding the case on its merits.
- Active case management—including raising a rule on the Court’s own initiative and inviting adversarial submissions—is ordinary judicial practice and does not, without more, warrant recusal.
Why It Matters
The decision illustrates the evidentiary and analytical discipline required for recusal applications in Australian federal litigation. Broad accusations against the judiciary cannot replace a particularised explanation of why the judge deciding the actual controversy might fail to act impartially.
It also confirms that judges may identify potentially dispositive procedural questions during case management without thereby prejudging them, provided the parties receive an opportunity to be heard.