NAFL v Minister for Immigration (No 2)

[2006] FMCA 406

FEDERAL MAGISTRATES COURT OF AUSTRALIA

NAFL v MINISTER FOR IMMIGRATION (No 2) [2006] FMCA 406

COSTS – Personal costs order against a former migration agent.

Federal Magistrates Act 1999 (Cth), s.79
Federal Magistrates Court Rules 2001 (Cth)
Migration Act 1958 (Cth), ss.48B, 417

Applicant NAGM of 2002 v Minister for Immigration [2002] FCAFC 396, (2002) 71 ALD 1
Knight & Anor v FP Special Assets Limited & Ors (1992) 174 CLR 178
Minister for Immigration v Shen [2002] FCA 899
NAFL v Minister for Immigration [2005] FMCA 1359
White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR 169

Applicant: NAFL

Respondent: MINISTER FOR IMMIGRATION & MULTICULTURAL AFFAIRS

File Number: SYG1716 of 2005

Judgment of: Driver FM

Hearing date: 21 February 2006

Delivered at: Sydney

Delivered on: 21 February 2006

REPRESENTATION

Mr A Volonski appeared on his own behalf

Counsel for the Respondent: Ms K Morgan

Solicitors for the Respondent: Clayton Utz

ORDERS

1. Mr Volonski pay part of the costs that NAFL was required to pay, pursuant to order 2 made on 19 September 2005, fixed in the sum of $600.

2. Mr Volonski pay the costs of and incidental to bringing the application, fixed in the sum of $2,700.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG1716 of 2005

NAFL

Applicant

And

MINISTER FOR IMMIGRATION & MULTICULTURAL AFFAIRS

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

1. I have before me an interlocutory application filed on 19 October 2005 for orders that Mr Arthur Volonski pay the Minister's costs incurred in the proceedings known as NAFL v Minister for Immigration[1] in the sum of $3,500, plus the costs of the present costs application.  The application is supported by three affidavits by Patrick David Reynolds, solicitor, the first filed on 19 October 2005 to which is annexed exhibit PDR 2, the second filed on 12 January 2006 to which is annexed exhibit PDR 3 and the third filed on 17 February 2006.  Reference is also made to a document known as PDR 1 at issue in the principal proceedings.  I also had regard to my judgment in the principal proceedings.

   [1] [2005] FMCA 1359

2. The Minister's application is supported by written submissions prepared by Ms Morgan, who also made oral submissions.  Mr Reynolds was not required for cross-examination.  Mr Volonski elected to give oral evidence.  In his evidence in chief, Mr Volonski stated that he is not currently a registered migration agent, although he was a registered migration agent between about 1996 and November 2005 except for a period of about six months in 1999 and 2000.  He was a registered migration agent at the time he provided assistance to applicant NAFL.  Mr Volonski recalled that he became involved with applicant NAFL in about 2004, although it may have in fact been 2005.  He recalled that he provided oral advice to applicant NAFL not to file proceedings for judicial review on the basis that the proceedings were likely to fail, because the decision of the RRT, which would be the subject of the proceedings, had previously been judicially reviewed.  Mr Volonski did not make or retain any written record of that advice.  Mr Volonski admits that he provided applicant NAFL with assistance.  He believes that his assistance was limited to the assistance which can be provided by a migration agent consistently with the code of conduct of migration agents.

3. Mr Volonski admitted assisting the applicant to apply for a bridging visa on at least one and possibly two occasions.  He was willing to provide assistance in the form of an application to the Minister for her intervention under the Migration Act 1958 (Cth) (“the Migration Act”) but it appears that such an application was not made. Mr Volonski admitted providing assistance to applicant NAFL in translating documents to and from the English language and that assistance extended to attending at least one conference with a lawyer who appears to have been the panel adviser appointed to advise applicant NAFL. Alternatively, it may have been a lawyer engaged privately.

4. Mr Volonski admitted encouraging the Minister's solicitors to send correspondence about the judicial review proceedings to him and to sending correspondence on behalf of the applicant to the Minister's solicitors, on the basis that he offered the service of a mail box to those applicants who required it.  Mr Volonski initially thought that he did not charge for his translation or mail clearing house services, although under cross-examination he was prepared to accept that he probably did charge for at least some translation services.  Mr Volonski said that he did not keep a file in relation to this matter, although he did keep files in relation to other matters where representation was more substantial.  He was not the migration agent assisting applicant NAFL in his proceeding before the Refugee Review Tribunal (“the RRT”).

5. Under cross-examination, Mr Volonski conceded that he appears to have charged applicant NAFL $980 for his services.  That is evidenced by the receipts appearing on pages 35 and 36 of exhibit PDR 3.  Page 34 of that exhibit is a handwritten record of the services provided by Mr Volonski's firm to applicant NAFL.  Those included the assistance of the attendance of his secretary at this Court to file the judicial review application, filed on 1 July 2005; the transmission of an affidavit said to have been prepared by the applicant and attendance to discuss further action on 26 July 2005; an attendance on 1 August 2005 with a solicitor; assistance in relation to an outline of submissions and assistance in relation to an appeal against the decision made by me summarily dismissing the judicial review application.

6. Mr Volonski was not able to explain what services he charged for in any comprehensive way. He clearly charged for his service in obtaining a bridging visa on behalf of the applicant but that only accounts for about $380. The statement of services contained on page 32 of exhibit PDR 3 identifies a probable additional charge of $290 for translation services and a possible additional charge of $500 for a request to the Minister under s.48B or s.417 of the Migration Act. There is no evidence that such a request was made. It appears likely that it was not. Clearly some other services were provided by Mr Volonski's firm for which he charged. He did not think that it was his service in providing a mail box, so it must be something else. The implication is that some of the services charged for by Mr Volonski were services to assist the applicant to progress his judicial review application in this Court. Mr Volonski conceded that he was aware of the prior judicial review proceedings and the poor prospects of success of the proceeding instituted on 1 July 2005.

7. The Minister contends that the consequence should be that Mr Volonski should be ordered to bear the costs of the unsuccessful legal proceeding in this Court. The Court's power to award costs under s.79(2) of the Federal Magistrates Act 1999 (Cth) (“the Federal Magistrates Act”) is essentially the same as that of the Federal Court. The Court's power under both the Federal Magistrates Act and the Federal Magistrates Court Rules 2001 (Cth) (“the Federal Magistrates Court Rules”) is a broad one and I find that the power is sufficiently wide to permit a costs order to be made against a non-party. General guidance as to when such an order should be made is provided by the High Court decision in Knight & Anor v FP Special Assets Limited & Ors (1992) 174 CLR 178. Mason CJ, Deane and Gaudron JJ held in that case that where a party to litigation is an insolvent person or a man of straw a non-party who has played an active part in the conduct of the litigation and who has or some person on whose behalf he is acting or by whom he has been appointed has an interest in the subject of the litigation is liable to have an order for costs made against him if the interests of justice require that it be made.

8. The issue was further considered in relation to migration proceedings in Applicant NAGM of 2002 v Minister for Immigration [2002] FCAFC 396 reported at 71 ALD 1. In that case the Full Federal Court overturned an order for costs against a non-party who was providing services as an unregistered migration agent, apparently for no fee. Their Honours said at paragraph 62:

   There are certain categories of cases in which the jurisdiction to award costs against a non-party has been exercised, if not frequently, then with some degree of regularity. One such category is where the non-party is considered to be the "real party" to the litigation: Knight v FP Special Assets Ltd, at 188, per Mason CJ and Deane J. Another is where the non-party is a legal representative of a party to the proceedings. A costs order may be made, for example, against a solicitor in consequence of his or her conduct in the litigation: Caboolture Park, at 231. While s 43 of the Federal Court Act empowers the Court to make a costs order against a legal representative of a party, a second source of jurisdiction is the "implied", "accrued" or "inherent" jurisdiction of the Court over its own officers: Caboolture Park, at 231.

9. Their Honours continued at paragraph 63:

   The jurisdiction to award costs against non-parties is not limited to these particular categories of cases.

10. Again, the High Court's decision in Knight is referred to.  At paragraph 64 their Honours noted that:

    Costs have been awarded against non-parties in other circumstances. For example, in Minister for Immigration & Multicultural Affairs v Shen [2002] FCA 899, Madgwick J ordered a migration agent to pay the Minister's costs to the extent that the agent had caused them to be incurred or enlarged. His Honour found (at [22]) that the agent had "cynically exploit[ed]" the Court's processes in a cause he well knew to be hopeless and that the applicant in the proceedings was "a man of straw". Moreover, the agent, who had provided his services for reward, was found to have provided legal services in contravention of the Legal Profession Act.

11. The Full Court noted that there is no reason in principle why the Court's jurisdiction to award costs against a non-party could not extend in an appropriate case to a non-lawyer who, without fee or reward, conducts legal proceedings or takes steps in such proceedings on behalf of the litigant.  Their Honours cautioned, however, that in considering whether a case is appropriate for an order of this kind, some general propositions should be borne in mind.  The first is that the object of the jurisdiction is to reimburse to a party costs which the party has incurred by reason of the conduct of the non-party.  The jurisdiction is compensatory, not punitive or disciplinary.  Secondly, their Honours noted that an order for the payment of costs by a non-party is exceptional and any application for such an order should be treated with considerable caution.  Thirdly, their Honours noted that the mere fact that the non-party has been actively involved in preparing and presenting a hopeless case will not of itself ordinarily justify a costs order against that person.

12. Their Honours noted that:

    In White v Flower & Hart, Goldberg J pointed out that some cases had suggested that a solicitor who commences or maintains proceedings with little or no prospects of success is at risk of an adverse costs order. His Honour said (at 231), correctly in our view, that a proposition expressed so broadly must be treated with considerable caution as it exposes a tension with the important right of a person to have a case conducted in the courts irrespective of the view which his or her legal adviser has formed about the case and its prospects of success.

    Goldberg J considered that something more than commencing or maintaining proceedings with little or no prospects of success was required for a costs order to be made against a practitioner. In his view (at 231):

    "Something more must be added to the equation such as, for example, an ulterior purpose, abuse of process or a serious dereliction of duty."

    Similarly, a stranger who, without reward and without contravening any statute, assists a person to institute or maintain legal proceedings will not, on that account alone, ordinarily be exposed to a costs order. Something more will be needed.

13. I accept on the basis of the evidence presented by the Minister that Mr Volonski, through his migration agent firm, was involved in the judicial proceedings before this Court.  The question is to what extent was he involved and whether that involvement was improper in a sense necessary to attract a costs order against him.  Mr Volonski asserts that he provided only migration services such as a migration agent might provide.  In the principal proceeding before me, applicant NAFL put a different view.  He stated from the bar table that Mr Volonski had prepared his judicial review application.  Mr Volonski denies that.  No one has called applicant NAFL to give evidence in relation to the costs application.  It is likely that he could have given relevant and admissible evidence.  It was open to either party to call applicant NAFL and in the circumstances I am unwilling to draw an adverse inference against either the Minister or Mr Volonski.

14. What is in evidence is correspondence from Mr Volonski's firm to the Minister's solicitors and correspondence from the Minister's solicitors to Mr Volonski's firm querying why they were corresponding with him. On page 48 of exhibit PDR 3 is a letter from applicant NAFL to the Minister's solicitors stating that he had authorised Mr Volonski to act on his behalf in relation to his application for a bridging visa and “other migration applications”. It is not clear what applicant NAFL meant. In my view, the inference is reasonably open that applicant NAFL had authorised Mr Volonski to act on his behalf in relation to his judicial review application. Apart from the bridging visa application or applications, there is no evidence of any other application being made under the Migration Act except the application to this Court. Mr Volonski's own records indicate (persuasively in my view) that he had involved himself to a significant degree in the judicial review application in assisting the applicant to prepare documents, to formulate submissions and to file documents. He had further assisted by directing correspondence through his firm to and from the applicant and the Minister's solicitors.

15. The extent of Mr Volonski's involvement in my view supports a conclusion that he was assisting the applicant to pursue his legal proceedings in circumstances where the proceedings were significantly under Mr Volonski’s care and control.  Mr Volonski was assisting the applicant to pursue proceedings which he believed would fail.  Although Mr Volonski says he warned the applicant of the likely outcome of the judicial review application his subsequent conduct was active encouragement for the pursuit of the litigation.  He profited from his conduct to the extent of approximately $600, leaving aside the money he was paid to make a bridging visa application.  In the principal proceedings I summarily dismissed the judicial review application on the basis that the Court lacked jurisdiction because the subject RRT decision had already been found to have been a privative clause decision.  The summarily dismissal application by the Minister also invited me to find an abuse of process.  I did not consider it necessary to do so, having made a jurisdictional finding but it was open to me to make a finding of an abuse of process.  I did not consider it appropriate to award costs on an indemnity basis in the absence of such a finding.

16. In my view, in this matter Mr Volonski has strayed beyond the proper role of a migration agent to the extent of actively encouraging the pursuit of hopeless litigation in the Court.  He should not have profited from that conduct and the interests of justice in my view require an order that he bear the Minister's costs of the legal proceedings that were summarily dismissed to the extent that he has profited.

17. I will order that Mr Volonski pay the costs or part of the costs that applicant NAFL was required to pay pursuant to order 2 made by me on 19 September 2005, fixed in the sum of $600.

18. The Minister also seeks costs of the application before me and in support of that Mr Reynolds tendered a letter dated 25 November 2005 (exhibit R2) in which the Minister offered to settle the claim on an all inclusive basis of $3,000. The offer was not accepted. The Minister has done less well than was probably anticipated in that letter in that only $600 has been awarded in respect of the earlier costs awarded against applicant NAFL. There is no basis for an award of costs of the application against Mr Volonski on an indemnity basis. I am told that the Minister has expended some $20,000 in bringing the application. I appreciate that substantial preparation was required. However, the costs of the application should be proportional to the outcome in the substance of the application, which was a fairly modest award of $600 and a potential award of approximately $3,500. Mr Reynolds sought the application of the Federal Court scale. I prefer to apply the scale of costs of this Court. No item of Schedule 1 to the Federal Magistrates Court Rules deals specifically with a costs application. However, stage 2 costs are in my view the closest appropriate item. In round figures the amount payable in respect of a stage 2 application is $2,000. I accept that, in addition, the Minister has incurred disbursements in terms of filing and photocopying expenses of not less than $700.

19. I will order that Mr Volonski pay the Minister's costs of an incidental to bringing the application, fixed in the sum of $2,700.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of Driver FM

Associate:

Date:  29 March 2006