O'Brien v Commissioner of the Australian Charities and Not-for-profits Commission
[2021] FCA 632
•9 June 2021
FEDERAL COURT OF AUSTRALIA
O’Brien v Commissioner of the Australian Charities and Not-for-profits Commission [2021] FCA 632
File number: QUD 108 of 2021 Judgment of: THAWLEY J Date of judgment: 9 June 2021 Date of publication of reasons: 10 June 2021 Catchwords: COSTS – application for the respondent to pay the applicants’ costs – where proceedings dismissed by consent shortly after commencing – where the commencement of proceedings was premature – where respondent acted reasonably and was not bound to fail – no order as to costs, except that the applicants pay the respondent’s costs of the applicants’ application for costs Legislation: Administrative Decisions (Judicial Review) Act 1997 (Cth) ss 3, 5, 6, Sch 1
Australian Charities and Not-for-profits Commission Act 2012 (Cth) ss 35-20, 155-5
Civil Dispute Resolution Act 2011 (Cth) ss 9, 12
Judiciary Act 1903 (Cth) s 39B
Cases cited: Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 Division: General Division Registry: Queensland National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 10 Date of hearing: 9 June 2021 Counsel for the Applicants: J Horton QC with E Hoiberg Solicitor for the Applicants: Neumann & Turnour Lawyers Solicitor for the Respondent: K Sypott of the Australian Government Solicitor ORDERS
QUD 108 of 2021 BETWEEN: TERRENCE JOHN O'BRIEN
First Applicant
WATCHTOWER BIBLE AND TRACT SOCIETY OF AUSTRALIA (ACN 002 861 225)
Second Applicant
AND: COMMISSIONER OF THE AUSTRALIAN CHARITIES AND NOT-FOR-PROFITS COMMISSION
Respondent
ORDER MADE BY:
THAWLEY J
DATE OF ORDER:
9 JUNE 2021
THE COURT ORDERS THAT:
1.There be no order as to costs of the proceedings, except that the applicants pay the respondent’s costs of the applicants’ application for costs, as agreed or assessed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(revised from transcript)THAWLEY J:
The background facts in relation to this application for costs were set out in the submissions of the respondent, the Commissioner of the Australian Charities and Not-for-profits Commission, in the following accurate way:
[3]On 24 November 2020, the Assistant Commissioner of the Australian Charities and Not-for-profits Commission (the ACNC) issued a Show Cause notice under s 35-15 of the Australian Charities and Not-for-profit Commission Act 2012 (Cth) (ACNC Act) in respect of the Second Applicant. That notice advised of a proposed decision to revoke the Second Applicant’s registration as a charity and invited written reasons from the Second Applicant as to why this should not occur.
[4] On 18 March 2021, the Second Applicant provided the ACNC with a detailed response to the Show Cause notice. In its response, the Second Applicant also requested an undertaking from the ACNC that 21 days’ notice would be given of an adverse decision. The Second Applicant requested a response to this request by 31 March 2021.
[5] On 19 March 2021, an officer of the ACNC acknowledged the Second Applicant’s response to the Show Cause notice and advised that the ACNC would be ‘in touch in due course’.
[6]On 26 March 2021, an officer of the ACNC emailed the Second Applicant’s solicitors, advising that the ACNC was still considering the request for an undertaking, that a decision would not be made in respect of the Second Applicant’s registration prior to 31 March 2021, and that an update would be provided on 9 April 2021.
[7] On 8 April 2021, an officer of the ACNC emailed the Second Applicant’s solicitors, advising that the ACNC was still considering the Second Applicant’s response and anticipated being able to provide a further update on its consideration of the response by 13 May 2021.
[8] On 12 April 2021, without notice to the ACNC, the Applicants filed the present proceedings.
[9] On 14 April 2021, the Assistant Commissioner decided not to revoke the Second Applicant’s registration.
On 20 April 2021, the parties provided the Court with proposed consent orders, which provided for the application to be dismissed and for the question of costs to be determined on the papers unless the applicants requested an oral hearing. Orders to that effect were subsequently made.
The applicants and respondent filed written submissions in respect of costs and the applicants requested an oral hearing.
Each party should bear its own costs of the proceeding except for this application for costs in respect of which the applicants should pay the respondent’s costs. There are two principal reasons for this conclusion.
First, the applicants’ application to this Court was premature, in circumstances where the Commissioner had indicated he was considering the applicants’ request for an undertaking not to make an adverse decision without first giving the applicants 21 days’ notice. The proceedings should not have been commenced. There was no imminent threat of a decision being made without notice to the applicant. Of itself this is sufficient to dispose of the application.
Secondly, even if this was not a case in which the applicant had brought the proceedings prematurely but had acted reasonably, this is a case which called for the application of the general principles articulated by McHugh J in Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin(1997) 186 CLR 622 at 624-625. In a familiar passage, his Honour stated (citations omitted):
In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd, the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent Council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans.
Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in South East Queensland Electricity Board v Australian Telecommunications Commission where his Honour ordered the respondent to pay 80 per cent of the applicant’s taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare.
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases.
This is not a case in which the respondent acted in any way unreasonably. This is not a case in which the respondent was bound to fail, for reasons including those to be addressed next. This is a case where it was most unlikely that a Court would make an order for costs in the applicant’s favour in light of the principles in Qin. In those circumstances, whilst there should be no order as to costs in respect of the proceedings in accordance with the principles in Qin, the applicants should pay the costs of their application for costs. This second basis is also of itself sufficient to dispose of the application.
It should also be observed that the proceedings as constituted, at least so far as the proceedings concern Watchtower Bible and Tract Society of Australia, could not have succeeded. The applicants applied to this Court for review under s 5 of the Administrative Decisions (Judicial Review) Act 1997 (Cth) (ADJR Act), which applies in respect of persons “aggrieved by a decision”. The originating application relied only upon s 5. Section 6 of the ADJR Act applies where a person “has engaged, is engaging, or proposes to engage, in conduct for the purpose of making a decision” to which the ADJR Act applies. The applicants eschewed reliance on s 6. A “decision” under the ADJR Act includes a proposed decision – see: ss 3(1) (definition of “decision to which this Act applies”) and 3(8) of the ADJR Act. A decision to revoke registration as a charity is a decision to which the ADJR Act does not apply: subpara (b)(i) of Sch 1 to the ADJR Act; ss 35-20, 155-5 of the Australian Charities and Not-for-profits Commission Act 2012 (Cth). No such decision had been made in this case, but if it had been made, the ADJR Act would not have applied. It is not necessary to reach a concluded view given that I would otherwise make no order as to costs except for the costs of this application. However, my view is that the proposed decision to revoke registration was not one to which the ADJR Act applied. If it were otherwise, the result would be that the ADJR Act does not apply to an actual decision to revoke registration but would apply to a proposed decision to revoke registration. That is an unlikely intention to attribute to the legislature. It is also not necessary to reach a concluded view about this because the parties both accepted that this Court would have had, or at least could have had, jurisdiction under s 39B(1) of the Judiciary Act 1903 (Cth). Nevertheless, it is relevant to point out that the proceedings as constituted were unlikely to have succeeded.
Finally, it should be observed that the provisions of the Civil Dispute Resolution Act 2011 (Cth) (CDR Act) were not adhered to. I understood the applicants to accept that the CDR Act applied. Section 9 of the CDR Act places an obligation on a lawyer acting for a person who is required to file a genuine steps statement to: (a) advise the person of the requirement; and (b) assist the person to comply with the requirement. The CDR Act permits the Court to take into account in determining costs whether a person required to file a genuine steps statement took genuine steps to resolve the dispute: s 12(1)(b). I cannot help but think that, if attention had been given to the obligations under the CDR Act and a genuine steps statement had been prepared by the applicants, that statement would have referred to the fact that the Commissioner was still considering whether to give an undertaking not to make a decision without first giving the applicants 21 days’ notice, which in turn would have given pause for thought about whether the proceedings should have been commenced at all.
For those reasons, the Court makes no order as to costs of the proceedings, except that the applicants should pay the respondent’s costs of this application for costs.
I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Thawley. Associate:
Dated: 10 June 2021
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