De Silva v Ruddock

[1998] FCA 311

FEDERAL COURT OF AUSTRALIA

COSTS - Application by 164 applicants to challenge certain migration regulations dismissed - circumstances in which the Court will depart from the usual order as to costs - public interest litigation - cost apportionment orders.

Re Wilcox;  Ex parte Venture Industries Pty Ltd (1996) 14 ALR 727
Mike Gaffken Marine Pty Ltd v Princes Street Marina Pty Ltd (unreported, Supreme Court of New South Wales, Young J, 15 July 1996)
Oshlack v Richmond River Council [1998] HCA 11

LIYANAGE PILAK ROBERT LEONARD DE SILVA AND OTHERS

v MR PHILIP RUDDOCK (IN HIS CAPACITY AS MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS)

VG 607 of 1997

JUDGE:         MERKEL J
DATE:           31 MARCH 1998
PLACE:         MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 607 of 1997

BETWEEN:

LIYANAGE PILAK ROBERT LEONARD DE SILVA AND OTHERS

APPLICANTS

AND:

MR PHILIP RUDDOCK (IN HIS CAPACITY AS MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS)
FIRST RESPONDENT

THE COMMONWEALTH OF AUSTRALIA
SECOND RESPONDENT

JUDGE:	MERKEL J
DATE:	31 MARCH 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

INTRODUCTION

On 19 February 1998 I ordered that the application in this matter be dismissed and reserved liberty to apply on the question of costs.

The applicants contended that I should make no orders as to costs on the ground that the matters raised in the proceeding involved the public interest.  Alternatively, it was contended that in the special circumstances of the case it was appropriate to order that each of the 164 applicants be liable only for their proportionate share of the costs.  The respondents opposed both applications and contended that there was no reason why the usual rule, that costs follow the event, ought not apply.

It is well established that the Court has an absolute and unfettered discretion to make orders as to costs but the discretion must be exercised judicially.  In some cases the Court may be justified in departing from the usual orders in relation to costs when the justice of the case so requires because of a “special or unusual” feature:  see Re Wilcox;  Ex parte Venture Industries Pty Ltd (1996) 141 ALR 727 at 733; or because of “exceptional or special” circumstances Oshlack v Richmond River Council [1998] HCA 11 at paras 135 and 143 per Kirby J. In Oshlack it was accepted by Gaudron and Gummow JJ at para 35 that the ‘general rule’ is that:

“a wholly successful defendant should receive his costs unless good reason is shown to the contrary.”

See also McHugh J at paras 66-7 and Kirby J at para 134).

The “usual order” is that costs follow the event:  Oshlack per Brennan CJ and McHugh J at paras 3 and 66-7, Gaudron and Gummow JJ at para 35 and Kirby J at para 134.

PUBLIC INTEREST LITIGATION

The applicants contended that their proceeding is “public interest litigation”. In Oshlack a judge of the Land and Environment Court of New South Wales in reliance on a “public interest litigation” ground made no order as to costs against an unsuccessful applicant for relief in relation to a development application. The High Court considered whether the concept of “public interest litigation” justified the approach taken. McHugh J (with whom Brennan CJ agreed) said that there is “inherent imprecision in the suggested concept of ‘public interest litigation’”. Gaudron and Gummow JJ described it as “a ‘nebulous concept’ unless given ... further content of a legally normative nature.” See also Kirby J at [135]. Their Honours did not find that the concept of “public interest litigation” offered any assistance in resolving the real issues in the case. McHugh J, with whom Brenann CJ agreed, said that “... the fact that the proceeding can be characterised as public interest litigation is irrelevant to the question whether the court should depart from the usual order that costs follow the event” (at para 51). Gaudron and Gummow JJ described the true issue in the case as being not whether the litigation was “public interest litigation” but whether, in view of the subject matter, scope and purpose of the statutory provision which conferred the general costs discretion in that case, the reasons given by the primary judge for declining to make an order as to costs were “definitely extraneous to any objects the legislature could have had in view”.

McHugh J observed (at para 65) that:

“Although the statutory discretion is broadly stated, it is not unqualified.  It clearly cannot be exercised capriciously.  Importantly, the discretion must be exercised judicially in accordance with established principle and factors directly connected with the litigation.” (footnotes omitted)

See also Kirby J at para 134. 

I do not accept that there are any public interest or other special aspects in the present case that would justify a departure from the usual order and principle that costs are generally awarded to indemnify a successful party in litigation:  see Oshlack per Brennan CJ at [1], McHugh J at [67], Kirby J at [143].

The present proceeding was brought for the individual benefit of the applicants, and cannot be characterized as being wholly or principally of a public interest character.  The fact that the proceeding involved elements of public law or the judicial review of the exercise of executive power does not, of itself, make the matter one in which the proceeding has been brought in the public interest.  Nor does the fact that issues are raised under the Racial Discrimination Act 1973 (Cth) have that consequence.  The proceeding was not brought by the applicants for the benefit of the public or to enforce a public duty.  Rather it was brought to enable them to remain in Australia.  In these circumstances the factual sub-stratum that might raise a public interest ground is absent. 

Accordingly, I reject the contention that no order should be made as to costs.

APPORTIONMENT OF COSTS

The applicants contended that if a costs order is to be made it should be apportioned equally as between the 164 applicants.  It was contended, inter alia, that the usual costs order can operate oppressively by reason of Clause 4004 Schedule 4 to the Migration Regulations, which states that a criterion to be taken into account in assessing eligibility for a visa to enter Australia is that the applicant for a visa:

“does not have outstanding debts to the Commonwealth unless the Minister is satisfied that appropriate arrangements have been made for payment.”

Apportionment was said to be appropriate as each applicant could be refused permission to re-enter Australia unless he or she pays the entire costs.  Although I accept that the regulation can operate harshly and oppressively against individual applicants this is not a factor connected with the litigation (see McHugh J at para 65) and it is not relevant to the exercise of the costs discretion.

However, there are two special or exceptional features about the present case.

1. The proceeding was commenced by the first applicant as a class action.  The group members were, inter alia, members of the Sri Lankan Humanitarian and Migration Association Incorporated.  As a result of difficulties with the class action in that form for the purposes of the urgent interlocutory relief which was sought to prevent the deportation of group members prior to the hearing, the proceeding was amended to a proceeding by the 164 applicants.  Primarily, it was only that fortuitous circumstance that exposed 163 of the applicants to the potential burden of a costs order against them.

2. The number of applicants is unusually large but that has not resulted in any additional cost to the respondents nor has it added to the length or complexity of the proceeding.

There are instances where a court has apportioned costs among defendants:  see Mike Gaffken Marine Pty Ltd v Princes Street Marina Pty Ltd (unreported, Supreme Court of New South Wales, Young J, 15 July 1996) at 2, and the cases there cited. However, I have not been referred to any instance where such an order has been made or refused in circumstances akin to the present case.

Separately, the features to which I have referred would not warrant an apportionment order.  However, I am satisfied that the combination of these features requires some departure from the general rule in the interests of justice. 

I propose to order that the applicants pay the respondents’ taxed costs of the proceeding but in the event that any applicant pays to the solicitor for the respondents a 1/164th share of the costs within six weeks of the costs being agreed between the solicitors for the parties or taxed, then that payment shall be in full and final discharge of that applicant’s liability for costs. 

The respondents contended that the large number of applicants might result in any order apportioning costs operating unjustly to the respondents as they would be forced to collect a small amount of costs separately from 164 persons who will be resident overseas.  My order avoids exposing the respondents to the multiple cost collection they feared but might afford them a greater prospect of recovering costs than they might otherwise have.  At the same time it affords the applicants the opportunity of avoiding the operation of a costs order that might have been unjust having regard to the two features to which I have referred.

I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel

Associate:        
Dated:             

Submissions for the Applicant submitted by:	Mr K H Bell QC and Ms D Mortimer
Solicitor for the Applicant:	Erskine Rodan & Associates
Date of Submissions:	13 March 1998.
Submissions for the Respondent submitted by:	Mr A Cavanagh QC and Mr O P Holdenson
Solicitor for the Respondent:	Australian Government Solicitor
Date of Submissions:	19 March 1998.
Date of Judgment:	31 March 1998.