CIQ17 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (No 2)
[2020] FCCA 3467
•23 December 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
CIQ17 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (No 2) [2020] FCCA 3467
File number(s): SYG 1693 of 2017 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 23 December 2020 Catchwords: MIGRATION – COSTS – whether successful applicant’s costs in a proceeding under the Migration Act 1958 (Cth) (Act) should be set in the amount provided for in Part 3 of Schedule 1 to the Federal Circuit Court Rules 2001 (Cth) – principles for determining how the costs of a successful party in a proceeding under the Act should be assessed – costs referred for taxation under Part 40 of the Federal Court Rules 2011 (Cth). Legislation: Bankruptcy Act 1966 (Cth)
Federal Circuit Court of Australia Act 1999 (Cth) s 79
Federal Court of Australia Act 1976 (Cth) s 43
Migration Act 1958 (Cth)
Civil Procedure Act 2005 (NSW) s 98
Federal Circuit Court Rules 2001 (Cth) rr 21.02, 21.03, 21.10, 44.15, Sch 1, Pt 3
Federal Court Rules 2011 (Cth) Pt 40
Cases cited: AZK15 v Minister for Immigration and Border Protection [2015] FCA 1444
Buckland v Watts [1970] 1 Q.B. 27
CIQ17 v Minister for Immigration & Anor [2020] FCCA 2679
Elders Trustee and Executor Company Ltd; Estate of Howard v Estate of Herbert (1996) 132 FLR 24
Fitzgerald v Wilson (1917) 13 Tas LR 50
Hinchliffe v University of Sydney (No.2) [2004] FMCA 640
Kazar (Liquidator) v Kargarian; In the Matter of Frontier Architects Pty Ltd (In Liq) [2011] FCAFC 136
Minister for Immigration and Border Protection v SZTQS [2015] FCA 1069
Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72
Robinson v Blackheart Industries Pty Ltd & Ors (No.3) [2015] FCCA 2542
SZRTP v Minister for Immigration & Anor (No.2) [2013] FCCA 711
SZSZA v Minister for Immigration & Anor and SZSZB v Minister for Immigration & Anor [2014] FCCA 379
SZUVZ v Minister for Immigration & Anor [2015] FCCA 2346
Number of paragraphs: 31 Date of hearing: 23 October 2020 Place: Sydney Counsel for the Applicant: Mr B Mostafa, by telephone Solicitor for the Applicant: Varess Solicitor for the First Respondent: Ms S Sangha of Mills Oakley Lawyers, by telephone ORDERS
SYG 1693 of 2017 BETWEEN: CIQ17
Applicant
AND: MINISTER FOR IMMIGRATION, CITIZENSHIP, MIGRANT SERVICES AND MULTICULTURAL AFFAIRS
First Respondent
IMMIGRATION ASSESSMENT AUTHORITY
Second Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
23 DECEMBER 2020
THE COURT ORDERS THAT:
1.The first respondent’s application to vary order 3 of the orders made on 25 September 2020 (Orders) is dismissed.
2.Pursuant to r.21.02(2)(c) of the Federal Circuit Court Rules 2001 (Cth) the applicant’s costs referred to in order 3 of the Orders, together with the applicant’s costs of the first respondent’s application to vary order 3, be referred for taxation under Part 40 of the Federal Court Rules 2011 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
On 25 September 2020 I quashed the decision of the second respondent (Authority) affirming a decision of a delegate of the first respondent (Minister) not to grant the applicant a Safe Haven Enterprise visa, and I ordered the Authority consider according to law the applicant’s application for review of the delegate’s decision.[1] I also ordered the Minister pay the applicant’s costs as agreed or assessed (Costs Order), although I granted the parties liberty to apply to vary or discharge the Costs Order.
[1] CIQ17 v Minister for Immigration & Anor [2020] FCCA 2679
The Minister exercised the liberty to apply, as a result of which the matter was listed for hearing before me on 23 October 2020. At the hearing the Minister submitted I should vary the Costs Order by ordering that the applicant’s costs be set in the amount (scale amount) provided for by Part 3 of Schedule 1 to the Federal Circuit Court Rules 2001 (Cth) (FCC Rules). The applicant, on the other hand, by his counsel, submitted I should not alter the Costs Order or, in the alternative, I should set the applicant’s costs in the amount for which the applicant’s costs would be taxed under Part 40 of the Federal Court Rules 2011 (Cth) (Federal Court Rules), or for such other amount I might consider to be appropriate. The applicant’s solicitor, Mr Varess, in an affidavit made on 24 September 2020, deposed that the applicant’s actual costs are $29,614.57, and expressed the opinion that, in his experience, if taxed under Part 40 of the Federal Court Rules, the applicant’s costs would be set in an amount equal to 76% of the applicant’s actual costs.
The question I consider in these reasons for judgment is whether I should vary the Costs Order by setting the applicant’s costs for the scale amount ($7,206) or for such other amount as I might consider appropriate. Before I consider the parties’ submissions it will be necessary to refer to the principal provisions that govern this Court’s power to award costs and to assess the amount of those costs.
PROVISIONS RELATING TO COSTS
I begin with s.79 of the Federal Circuit Court of Australia Act 1999 (Cth) (FCC Act), which provides:
(1) This section does not apply to family law or child support proceedings or proceedings in relation to a matter arising under the Fair Work Act 2009 or section 14, 15 or 16 of the Public Interest Disclosure Act 2013.
(2) The Federal Circuit Court of Australia or a Judge has jurisdiction to award costs in all proceedings before the Federal Circuit Court of Australia (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs must not be awarded.
(3) Except as provided by the Rules of Court or any other Act, the award of costs is in the discretion of the Federal Circuit Court of Australia or Judge.
The key expression is “jurisdiction to award costs” in s.79(2); and the central word in that expression is “costs”.[2] Although not defined in the FCC Act or the FCC Rules, “costs” has a well-established meaning in legal practice. It includes the “remuneration of a solicitor for professional services rendered to a client”.[3] “Costs” is also often used to include “disbursements”; that is, money the client or the client’s lawyer “has actually had to pay out to other people, such as witnesses, counsel, professional advisers and so forth”.[4] In these reasons for judgment, I will use “costs” to mean “costs and disbursements”.
[2] I repeat in this part of my reasons what I said in Robinson v Blackheart Industries Pty Ltd & Ors (No.3) [2015] FCCA 2542, at [6]-[13]
[3] Elders Trustee and Executor Company Ltd; Estate of Howard v Estate of Herbert (1996) 132 FLR 24, at page 29 (NTCA, Gallop J).
[4] Buckland v Watts [1970] 1 Q.B. 27, at page 37 (Sir Gordon Willmer)
The next word to consider is “award”. That simply means “order”. To “award costs”, therefore, is to “order costs”. The expression “order costs”, however, is shorthand. An order that only states that a party pay the costs of another party or person means that the party or person against whom the order is made is liable to pay to the beneficiary of the order an amount to be assessed for the purpose of indemnifying, in whole or in part, the beneficiary for the costs the beneficiary has paid or is liable to pay. An order that a person pay the costs of another person in a particular amount means that the person against whom the order is made is liable to pay to the beneficiary of the order that particular amount for the purpose of indemnifying, in whole or in part, the beneficiary for the costs the beneficiary has paid or is liable to pay in connection with the proceeding.
This Court may be required to consider up to three questions when hearing an application for costs. The first is whether the Court should make an order for costs. Subject to any particular statutory provision to the contrary, whether or not the Court should order costs is in its discretion; but the proper exercise of that discretion usually requires the Court to order the party or person who has not succeeded in the proceeding to pay the costs of the party who has succeeded.[5]
[5] “The exercise of the discretion takes account of all of the contextual circumstances of the litigation and the conduct of the parties. One aspect of the award of costs is a recognition that a party has been put to expense which, taking account of the merits as ultimately found on the trial of the action, might otherwise have been avoided. That consideration does not infuse the award of costs with any sense of penalty or punishment but simply recognises the compensatory nature of an award of costs, in context and according to principle. That is why an award of costs, although involving the exercise of a discretion, generally favours the successful party.” - Kazar (Liquidator) v Kargarian; In the Matter of Frontier Architects Pty Ltd (In Liq) [2011] FCAFC 136, at [9] (Greenwood, Rares and Foster JJ)
Assuming the Court decides to order costs, the second question it must decide is the scope of the order. That is, the Court must identify those activities that have generated the beneficiary’s liability to pay costs for which he or she is to be indemnified, in whole or in part, by the order for costs. The scope of the order is usually expressed in brief terms as part of the order for costs. Thus, the court may make an order that a party pay the “costs of the action” or the “costs of the proceedings” or the “costs of trial”, or the “costs in the cause” or the “costs in any event” or just simply the costs of the successful party.[6]
[6] G E Dal Pont Law of Costs Third Edition 2013 at [1.14]-[1.27]
Having decided the scope of the order for costs, the Court may do nothing more than make the order for costs. If the Court does no more, r.21.10 of the FCC Rules provides that the party entitled to costs in a proceeding (other than a proceeding to which the Bankruptcy Act 1966 (Cth) applies) is entitled to costs in accordance with Parts 1 and 2 of Schedule 1 to the FCC Rules, and to disbursements the party has properly incurred. Schedule 1 to the FCC Rules identifies a relatively small number of, but in most cases broadly defined, activities or events that occur in a proceeding, and assigns an amount to each activity or event. The assessment of costs in accordance with Schedule 1 to the FCC Rules, therefore, consists in identifying the events that have actually occurred in the proceeding that fall within the scope of the order for costs and which also fall within the terms of the activities or events specified in Schedule 1 to the FCC Rules, assigning the appropriate amount to each such activity or event, identifying all disbursements and the amounts of those disbursements, and adding all these amounts.
Schedule 1 to the FCC Rules, however, contains a separate part (Part 3) which applies to proceedings brought under the Migration Act 1958 (Cth) (Migration Act). Part 3 is relevant to such proceedings because of r.44.15 of the FCC Rules, being a provision contained in Part 44 of the FCC Rules which applies to proceedings under the Migration Act. Rule 44.15 of the FCC Rules provides:
(1)The Court may, in relation to a proceeding that is concluded, order an unsuccessful party in the proceeding to pay the costs of a successful party in accordance with Division 1 of Part 3 of Schedule 1.
(2)If:
(a) the applicant files a notice of discontinuance in a proceeding in which a respondent has sought costs in the response; and
(b) the applicant does not file with the notice an application in respect of costs;
a Judge or a Registrar may, without hearing the parties, make an order in chambers in accordance with Division 2 of Part 3 of Schedule 1 for the costs of the respondent.
(3)This rule does not limit a party's right to apply, under Part 21, for an order as to costs of the application.
Thus, on a literal reading of r.21.10 of the FCC Rules, if in a proceeding, including a proceeding under the Migration Act, the Court makes an order for costs without ordering that the beneficiary of the costs order is entitled to costs other than in accordance with Part 1 or Part 2 of Schedule 1 to the FCC Rules, the beneficiary will be entitled to costs in accordance with Part 1 or Part 2 of Schedule 1 to the FCC Rules.
Instead of making no order other than that a party pay another party’s costs, the Court may do one of four things in a proceeding brought under the Migration Act.
(a)The Court may make an order under r.44.15 of the FCC Rules.
(b)The Court may make an order under r.21.02(2)(c) of the FCC Rules to refer the costs for taxation under Part 40 of the Federal Court Rules or Chapter 19 of the Family Law Rules 2004 (Cth) (Family Law Rules). “Taxation”, as used in r.21.02 of the FCC Rules, means the procedures for assessing costs prescribed by Part 40 of the Federal Court Rules and Chapter 19 of the Family Law Rules. Taking Part 40 of the Federal Court Rules as an example, taxation requires the person in whose favour a costs order has been made to file and serve a bill of costs in the required form which contains particulars of the work done by the lawyers, their staff and agents, the costs claimed for the work, and the disbursements incurred.
(c)The Court may make an order under r.21.02(2)(b) of the FCC Rules to set “the method by which the costs are to be calculated”. This expression may be taken to refer to the basis on which costs are to be calculated. That at the very least may include on a “party and party basis”, or on a “solicitor client basis”, or on an “indemnity basis”.[7]
(d)The Court may set the amount of the costs pursuant to r.21.02(2)(a) of the FCC Rules.
[7] G E Dal Pont Law of Costs Third Edition 2013, Chapter 16.
The effect of these provisions, then, is that:
(a)unless the Court otherwise orders, a party, including a party in a proceeding brought under the Migration Act, is entitled to costs in a proceeding in accordance with Parts 1 and 2 of Schedule 1 to the FCC Rules; and
(b)in the case of a proceeding under the Migration Act, the orders the Court may otherwise make are to set costs in accordance with Part 3, or to set some other amount for costs, or to set the method by which the costs may be calculated, or to refer the costs for taxation under Part 40 of the Federal Court Rules.
It will therefore be seen the Court has a discretion in relation to the orders it may make for the assessment of costs. The question I must consider in these reasons for judgment is the principles that should govern the exercise of that discretion.
PARTIES’ SUBMISSIONS
Ms Sangha, who appeared for the Minister, submitted the applicant is entitled to no more than the scale amount because the scale amount represents what the FCC Rules contemplate are the reasonable costs for migration matters of average complexity; and the proceeding before me is a matter of average complexity. Ms Sangha further submitted it is a matter for lawyers who appear in migration matters what legal costs they wish to incur, and in particular whether they wish to incur amounts beyond the scale amount. Ms Sangha relied on the following passage from the judgment of Judge Driver in SZUVZ v Minister for Immigration& Anor (emphasis added):[8]
The Court has put in place a scale of costs for migration proceedings based on the Court’s assessment of what costs can be considered to be reasonably and properly incurred on a party and party basis for proceedings of average complexity at various stages. It is a matter for applicants and their legal advisers what legal costs they wish to incur in preparing for a hearing on asserted jurisdictional error. The same applies to the Minister.
There needs to be good reason to depart from the scale. . . .
[8] SZUVZ v Minister for Immigration& Anor [2015] FCCA 2346, at [4], [5]
Ms Sangha also referred me to the following passage from the judgment of Driver FM (as his Honour then was) in Hinchliffe v University of Sydney (No.2) (emphasis added):[9]
It follows from the foregoing analysis that the respondent should receive an order for costs on a normal party/party basis, which the applicant has already conceded. Ordinarily, in human rights proceedings, costs are assessed in accordance with the event based scale appearing in schedule 1 to the Federal Magistrates Court Rules. That scale was adopted by the Court in order to provide simplicity and certainty in determining issues of costs. In some cases, as is likely to be the case here, a successful party will incur significantly more in costs than is recoverable pursuant to the Court scale. It does not follow that that is an unjust result, where it occurs. The Court scale is publicly known and parties to litigation should be aware that the scale is likely to determine their maximum recoverable costs should they succeed. If parties wish to incur significantly more costs in litigation in this Court than they could ever recover, that is a matter for them.
In any event, it should not be assumed that because substantial legal costs have been incurred by a party, their money has been well and wisely spent. The scale of costs ordinarily applicable in human rights proceedings reflects the Court's assessment of what costs can be accepted as reasonable in ordinary proceedings. If proceedings are exceptionally long or complex there is the opportunity to ask for the proceedings to be transferred to the Federal Court, where a more appropriate scale of costs for long and complex proceedings would be available. That was not done in this case.
An additional factor is that there is commonly a disparity between an applicant and a respondent in human rights proceedings in their relative capacity to fund the legal proceedings. This applicant was legally aided but commonly applicants must depend upon their own limited financial resources. Commonly, a respondent will have access to significantly more funds than an applicant. This Court's event based costs scale establishes a level playing field. I see no reason to depart from it in these proceedings.
[9] Hinchliffe v University of Sydney (No.2) [2004] FMCA 640, at [10]-[12]
Counsel for the applicant, on the other hand, submitted that in the vast majority of cases the Minister would like successful applicants to be awarded no more than the scale amount, but that is not appropriate. The purpose of the jurisdiction to award costs is to indemnify the successful party in relation to the costs he or she has incurred, and “indemnify” in this context is understood by lawyers to mean a partial indemnity. Counsel for the applicant also submitted that although r.44.15 of the FCC Rules empowers the Court to set costs in accordance with Part 3, it does not create a presumption that the Court would set costs in migration matters in accordance with Part 3, although the scale amount would be appropriate where the Minister succeeds against an unrepresented party or where the case is simple requiring no counsel. Counsel submitted that the starting point for any order for costs outside these simple matters would be an order that the unsuccessful party pay such costs as agreed or assessed.
After the hearing the applicant’s solicitor sent an email to my associate identifying the authorities the applicant considers relevant. The first is Minister for Immigration and Border Protection v SZTQS.[10] One of the issues in that case was whether a judge of this Court denied a successful applicant procedural fairness by ordering that the applicant’s costs be set in the scale amount. In the course of this part of the appeal, Griffith J said:[11]
Under s 79 of the FCCA Act, the primary judge had a discretion to award costs, subject to the FCCA Rules.
The costs discretion must be exercised judicially (Howards Storage World Pty Ltd v Haviv Holdings Pty Ltd . . . .). In exercising this discretion judicially, it is important to bear in mind that “the justification for the general principle that costs follow the event” is that the “primary purpose of an award of costs is to indemnify the successful party” (Howards Storage at [61], referring to McHugh J’s judgment in Oshlack v Richmond River Council . . . .).
[10] Minister for Immigration and Border Protection v SZTQS [2015] FCA 1069
[11] Minister for Immigration and Border Protection v SZTQS [2015] FCA 1069, at [100]-[101]
The second case is AZK15 v Minister for Immigration and Border Protection. Among the questions arising in that case was whether a Judge of this Court denied the applicant procedural fairness in not granting the applicant an adjournment to require the Minister to prove his actual costs, but instead ordered costs. The second was whether the Judge denied the applicant procedural fairness by not adjourning the hearing to permit him to file evidence of his impecuniosity. Jagot J found the Judge did not deny the applicant procedural fairness by refusing him an adjournment to enable the applicant to file evidence of his impecuniosity because her Honour found the Judge refused the adjournment because her Honour found the Judge correctly observed that impecuniosity is not a reason to withhold the making of the usual order as to costs. Jagot J did, however, find that the Judge erred in setting costs in the scale amount rather than making “the usual order as to costs” (emphasis added):[12]
Be that as it may, I accept that if the appellant wanted to see proof of the costs incurred then the discretionary options available to the primary judge consistent with the requirements of procedural fairness were only two. The primary judge could have adjourned the matter to enable the Minister to provide an affidavit proving the costs. Alternatively, the primary judge could have decided that in the circumstances the usual order as to costs should be made, the appellant’s claimed impecuniosity not being a sufficient reason to adjourn the costs issue as set out above. The primary judge erred in making the fixed sum costs order. The appellant was denied procedural fairness in this regard. Given the circumstances I consider that this aspect of the matter should not be remitted to the primary judge. Rather, I should make an order setting aside the costs order and replacing it with an order for the usual order as to costs.
[12] AZK15 v Minister for Immigration and Border Protection [2015] FCA 1444, at [68]
The third case is SZSZA v Minister for Immigration & Anor and SZSZB v Minister for Immigration & Anor,[13] where there was no dispute the applicant should receive an amount above that provided for in Part 3. In assessing the amount, Judge Driver said:[14]
I accept that the applicants should recover an amount in excess of scale costs, especially having regard to the involvement of counsel in each matter which, in my view, was reasonable and which no doubt played a factor in the clarification of the legal issues and the ultimate resolution.
[13] SZSZA v Minister for Immigration & Anor and SZSZB v Minister for Immigration & Anor [2014] FCCA 379
[14] SZSZA v Minister for Immigration & Anor and SZSZB v Minister for Immigration & Anor [2014] FCCA 379, at [7]
The fourth case is SZRTP v Minister for Immigration & Anor (No.2) [2013] FCCA 711 where Judge Nicholls made the following observations about Part 3:[15]
I take the view that the items set out in the relevant Schedule to the Rules are a guide to what may be generally considered to be reasonable in matters of this type. However, while the Schedule seeks to accommodate a number of scenarios (for example, a half day hearing or a full day hearing) it cannot be taken to cover the diversity and vagaries of each case in the relevant cohort of cases. The Court’s discretion should be exercised with reference to the actual circumstances presented in each case.
In my view, the Schedule sets out a guide as to what may be reasonable for the Court to have regard to as a touchstone (a “reality check” if you like) to its consideration. However, the Court’s consideration cannot ignore the circumstances of each individual case.
[15] SZRTP v Minister for Immigration & Anor (No.2) [2013] FCCA 711, at [46], [47]
The Minister submits SZSZA does not assist the applicant because that case concerned the costs consequences of consent orders made at an interlocutory stage of the proceedings, and where there was additional work undertaken in relation to a notice to produce. The Minister further submits that SZRTP also does not assist the applicant because the case concerned an application for judicial review of a decision of an Independent Assessment Reviewer which the Court held was not a “migration decision . . . because it was not a ‘decision’ for the purposes of the Act at all”.[16]
[16] SZRTP v Minister for Immigration & Anor (No.2) [2013] FCCA 711, at [18]
PRINCIPLES
Whether I should make an order that the applicant be paid no more than the scale amount does not turn on the particular facts of the cases to which the parties have referred. It turns on the identification and application of the correct principles that ought to govern the exercise of the Court’s power to assess costs. As will appear shortly, it largely turns on the proper construction of the provisions I have already identified.
It is true that in SZUVZ Judge Driver observed that Part 3 reflects the Court’s assessment of the reasonable costs for matters under the Migration Act that are of “average complexity at various stages”, and that it is up to a party’s lawyers to determine the work they are willing to do. There are, however, a number of matters that may be noted about his Honour’s observations.
(a)First, as counsel for the applicant submitted, there is no provision in the FCC Act or the FCC Rules that requires the Court to assess costs in proceedings under the Migration Act in accordance with Part 3; r.44.15 of the FCC Rules provides the Court may set costs in accordance with Part 3.
(b)Second, there are the provisions I have identified that permit the Court to set costs for an amount other than in accordance with Part 3: the Court can set a different amount; it can order that costs be assessed by reference to a particular method; and under r.21.02(2)(c) the Court can refer costs to be taxed under Part 40 of the Federal Court Rules. These provisions, and in particular r.21.02(2)(c) of the FCC Rules, form part of the statutory context in which r.44.15 must be construed. Thus, r.44.15 of the FCC Rules cannot be regarded as a default rule because it is only one of a number of orders the Court can make in relation to the setting of costs in relation to proceedings that include proceedings under the Migration Act.
(c)Third, and more significantly, there is s.79(2) and (3) of the FCC Act. These subsections are cast in similar terms to provisions that confer jurisdiction on other courts to award costs.[17] It is reasonable to suppose that Parliament intended s.79 of the FCC Act to be construed having regard to what has been said about the purposes of a court’s jurisdiction to award costs, namely, that the “primary purpose of an award of costs is to indemnify the successful party” against the legal costs the successful party incurred, but which he or she would not have incurred had “the litigation . . . not been brought”.[18]
(d)Fourth, it is also reasonable to suppose that s.79(2) and (3) of the FCC Act are to be construed by reference to the long established principles and practices that have been applied in and associated with the quantification of the costs which, in the eyes of the law, would sufficiently indemnify the successful party for the costs he or she has incurred. Although it has been said that the primary purpose of an award of costs is to indemnify the successful party against the costs he or she has incurred, the law does not require a full indemnity; it only requires a “fair indemnity”.[19] The courts have developed principles, and rules of court have been enacted, that require the application of standards that usually result in the quantification of recoverable costs that only partially indemnify the successful party against the costs he or she has actually incurred. There are two classes of standards that operate to give successful parties, at least in most cases, only a partial indemnity. The first are standards that identify the range of legal work for the cost of which the party should be indemnified. The most common standard is known as “party and party basis”, and this consists of work that is “necessary or proper for the attainment of justice or the protection of the rights of the party by whom they were incurred”.[20] The second class of standards are those that value the work that is considered to have been reasonably performed. The traditional method of valuation has been the assignment of values to particular items of work, and the provision of general guidelines for valuing other items of work. That is the method employed by Part 40 of the Federal Court Rules.
(e)Fifth, there is r.21.03(1) of the FCC Rules which permits the Court to “specify the maximum costs that may be recovered on a party and party basis (a) by order at the first court date; and (b) of its own motion or on the application of a party”. That the FCC Rules expressly provide in r.21.03 a power for the Court to set in advance of a hearing the maximum amount of costs that the successful party may recover tells against construing r.44.15 of the FCC Rules as being the means by which “parties to litigation” under the Migration Act are made “aware” that the “maximum recoverable costs should they succeed” are those provided for by Part 3, [21] and by reference to which parties decide “what legal costs they wish to incur in preparing for a hearing on asserted jurisdictional error”.[22]
[17] See, for example, s.43 of the Federal Court of Australia Act 1976 (Cth); s.98 of the Civil Procedure Act 2005 (NSW)
[18] Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72, at [67]
[19] Fitzgerald v Wilson (1917) 13 Tas LR 50, at page 51: “[C]osts between party and party are in the nature a fair indemnity.”
[20] Re Windeyer, Fawl & Co (1930) 31 SR (NSW) 145, at page 149
[21] Hinchliffe v University of Sydney (No.2) [2004] FMCA 640, at [10]
[22] SZUVZ v Minister for Immigration& Anor [2015] FCCA 2346, at [5]
The true position is that, subject to the exceptions it identifies, s.79 of the FCC Act confers on this Court the same broad jurisdiction to award costs as equivalent provisions confer on most courts; and the jurisdiction is conferred for the purpose for which such jurisdiction has been conferred on courts in general, namely, to empower the Court to make orders that fairly “indemnify the successful party” against the legal costs the successful party incurred, but which he or she would not have incurred had “the litigation . . . not been brought”.[23] That jurisdiction, and the purposes for which it has been granted, extends to proceedings under the Migration Act.
[23] Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72, at [67]
It is true the FCC Rules contain provisions that regulate the exercise of the jurisdiction conferred by s.79 of the FCC Act; but none of these rules is mandatory. It is within the discretion of the Court that is expressly conferred by s.79(3) of the FCC Act to determine which of the powers for the assessment of costs it will exercise in any given case; and that discretion is to be exercised having regard to the principles that have been applied in the assessment of costs. If there is any overriding principle in relation to the assessment of costs, it is that costs should be set to provide the successful party a fair indemnity for the costs he or she has incurred in having had to litigate.
When faced with an application for an order that the Court set the amount of a successful party’s costs, or an order to determine the method by which such costs are to be assessed, the principal question the Judge should therefore address is whether he or she is in a position to assess for himself or herself the amount that would represent a fair indemnity for the costs the successful party has incurred. In determining that question in the context of a proceeding under the Migration Act, the Judge may have regard to a number of matters, including the following:
(a)The nature of the proceeding. A proceeding that involves a few simple and standard procedural steps, a short hearing, and no substantial issue of fact or of law is likely to be a proceeding in which a Judge would be confident he or she could quickly ascertain the amount that would reflect a fair indemnity.
(b)It may be accepted, as Judge Driver noted in SZUVZ, that the amounts stated in Part 3 represent an assessment by the Court of what can be considered to be reasonably and properly incurred in a proceeding under the Migration Act on a party and party basis; but in relation to what type of proceeding? His Honour suggested that in making r.44.15 of the FCC Rules the Court had in mind proceedings of “average complexity”. That, with respect, is doubtful if for no other reason than it is difficult to assess what could constitute a proceeding that is of “average complexity”. The more likely type of proceeding the Court would have had in mind when making r.44.15 of the FCC Rules, because it is more easily identifiable, is what may be described as a typical proceeding under the Migration Act. Most proceedings under the Migration Act are brought by applicants who are not legally represented and who, for that reason, do not understand the grounds on which this Court may set aside migration decisions. An overwhelming proportion of such applicants fail. In such typical cases, it would be open to a Judge to regard the amounts stated in Part 3 as a reasonably accurate guide of a fair indemnity for the successful party’s – usually the Minister’s – costs. But even here, the observations Judge Nicholls made in SZRTP would need to be borne in mind, namely, that the “Court’s discretion should be exercised with reference to the actual circumstances presented in each case”.[24]
(c)The third matter that may be relevant is if there is evidence of the actual costs the successful applicant has incurred, together with some evidence about what proportion of such costs would be allowed if the costs are referred to be taxed under Part 40 of the Federal Court Rules. If, for example, there is evidence that suggests the actual costs of the successful applicant, after taxation, will substantially exceed the scale amount, it might be open to the Judge to conclude he or she is not satisfied the scale amount would reflect a fair indemnity for the costs a successful party has incurred.
[24] SZRTP v Minister for Immigration & Anor (No.2) [2013] FCCA 711, at [46]
This analysis is consistent with AZK15, where Jagot J distinguished between an order fixing costs in accordance with Part 3 and “the usual order as to costs”. It is also consistent with the observations Judge Nichols made in SZRTP that the “relevant Schedule to the Rules are a guide to what may be generally considered to be reasonable in matters of this type”.[25]
[25] SZRTP v Minister for Immigration & Anor (No.2) [2013] FCCA 711, at [46]
DETERMINATION
I now consider whether I should discharge the Costs Order and set the applicant’s costs in the scale amount. The following matters are relevant:
(a)First, the proceeding before me is not a typical proceeding under the Migration Act. The applicant is represented; and the applicant relied on grounds that obviously recognised the proper legal grounds on which this Court may set aside a decision made by the Authority.
(b)Second, there is the nature of the proceeding. It cannot be characterised as a simple or straightforward matter. The ground on which the applicant succeeded relied on an understanding of the material that was before the Authority, and the reasoning of the Authority. The ground also relied on knowledge, and the application, of the principles for determining when it is open to a court exercising judicial review to infer the Authority did not consider an item of evidence, and also on knowledge, and the application, of the principles for determining whether the Authority’s not considering information was material to its decision.
(c)Third, there is evidence of the applicant’s costs and of what may be assessed as reasonable if the applicant’s costs were taxed under Part 40 of the Federal Court Rules. That evidence suggests that the applicant’s costs, when taxed under Part 40 of the Federal Court Rules, might be significantly higher than the scale amount.
In these circumstances, I cannot be satisfied that the scale amount reflects or could reasonably be supposed to reflect a fair indemnity of the costs the applicant has incurred in the proceeding. That, then, leaves the question whether I should assess what would constitute a fair indemnity of the applicant’s costs.
Although I cannot say I am incapable of assessing what would constitute a fair indemnity of the applicant’s costs, I am satisfied that it would be preferable for that question to be determined by the process of taxation, being the method by which the reasonableness of a party’s costs are usually assessed. I propose, therefore, not to disturb the Costs Order, but to vary it by making an order under r.21.02(2)(c) of the FCC Rules that the applicant’s costs, including the costs of the Minister’s application to vary the Costs Order, be referred for taxation under Part 40 of the Federal Court Rules.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 23 December 2020
19
9
7