SZMJQ v Minister for Immigration and Anor (No.2)
[2009] FMCA 1137
•24 November 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SZMJQ v MINISTER FOR IMMIGRATION & ANOR (No.2) | [2009] FMCA 1137 |
| MIGRATION – Costs – application for costs on an indemnity basis – Offers of Compromise – where applicant offered to pay his own costs if Minister agreed to consent orders remitting the decision to the Tribunal – where offer was rejected and applicant ultimately successful – where proposed orders did not contain details of the alleged error of the Tribunal – whether offer was complete – whether offer was truly an offer of compromise – whether offers of compromise capable of being made in public law proceedings. |
| Migration Act 1958 (Cth), ss.48B, 417, 477 Migration Regulations 1994 (Cth) Federal Court Rules (Cth) Federal Magistrates Court Rules 2001 (Cth) |
| SZMJQ v Minister for Immigration [2009] FMCA 1068 G E Dal Pont, Law of Costs, 2nd ed (2009) |
| Applicant: | SZMJQ |
| First Respondent: | MINISTER FOR IMMIGRATION & CITIZENSHIP |
| Second Respondent: | REFUGEE REVIEW TRIBUNAL |
| File Number: | SYG 883 of 2009 |
| Judgment of: | Raphael FM |
| Hearing date: | 12 November 2009 |
| Date of Last Submission: | 12 November 2009 |
| Delivered at: | Sydney |
| Delivered on: | 24 November 2009 |
REPRESENTATION
| Solicitors for the Applicant: | Fragomen |
| Solicitors for the Respondents: | Mr A Markus, Australian Government Solicitor |
ORDERS
Application dismissed.
Applicant to pay the First Respondent’s costs assessed in the sum of $2,000.00, such costs to be deducted from the amount payable to the applicant pursuant to my orders of 30 October 2009.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 883 of 2009
| SZMJQ |
Applicant
And
| MINISTER FOR IMMIGRATION & CITIZENSHIP |
First Respondent
| REFUGEE REVIEW TRIBUNAL |
Second Respondent
REASONS FOR JUDGMENT
In this matter the applicant seeks indemnity costs pursuant to the provisions of O 23 of the Federal Court Rules following his success in persuading the Court that the Refugee Review Tribunal had fallen into jurisdictional error in the manner in which it reached its decision and securing from this Court constitutional writs, requiring the matter to be remitted to the Tribunal where it would be heard and determined according to law; SZMJQ v Minister for Immigration [2009] FMCA 1068.
The applicant, who is a citizen of China, claimed to be a person to whom Australia owed protection obligations for the Convention reason of religion. He claimed to be a Catholic who was converted to that religion by an old friend of his mothers. He joined a house church. On 8 August 2006 he was attending a prayer meeting with five others when the house was raided and the police took away religious pictures, bibles and some videos. All six were taken to the local police station where they were locked up in separate underground cells. The applicant claimed to have been beaten up by the police during the course of his interrogation. He was sentenced to 10 days administrative detention and fined RMB 1000 Yuan. He was threatened with criminal detention if he did not sign what he described as a “regret letter” agreeing not to practise his religion. He signed because of the beating that he had received.
The applicant’s claims were rejected by the delegate and he sought review of that decision from the Refugee Review Tribunal. He appeared before a first Tribunal. That Tribunal came to adverse conclusions about his credibility. One of the areas in which the applicant’s credibility was in doubt related to the signing of the regret letter.
Upon reading the Tribunal’s decision letter, the applicant became aware that the Tribunal had based its credibility findings against him, at least in part, on a mistranslation of his evidence surrounding the signing of the regret letter. He wrote to the Minister requesting that the Minister exercise his discretion under s.417 or s.48B of the Migration Act 1958 (Cth) (the “Act”). The Minister declined. There was further correspondence between those acting for the applicant and the Minister culminating in a final letter from the Minister informing the applicant that his case would not be brought to the Minister’s attention for consideration under ss.417 or 48B of the Act. There was then an application made to this Court which was withdrawn and an application made to the High Court, both of which made reference to the interpretation error. Following the commencement of the High Court proceedings, the Migration Legislation Amendment Act (No.1) 2009 (Cth) amended s.477 such that an application to this Court needed to be lodged within 35 days from the date of the decision. The transitional provisions in that amending legislation provided that in respect of applications lodged after 15 March 2009 seeking review of Tribunal decisions predating it, 15 March was deemed to be the date of decision for the purposes of s.477 (item 7 Schedule 2). As a result of this amendment the applicant then abandoned his proceedings in the High Court and commenced proceedings again in this Court. Those proceedings again sought judicial review alleging jurisdictional error arising out of a mistranslation. On 22 October 2009 the matter was heard before me and on 30 October 2009 I found that the fact which was the subject of the interpretation error was one of a series of facts which the Tribunal used to make a finding that the applicant’s evidence was not credible:
“[16] [T]he Tribunal does not place any differential weighting on the reasons so I have taken them all as having equal weight. This being the case, I take the view that the error was material to the conclusions of the Tribunal adverse to the applicant.”
I made orders in the nature of constitutional writs and ordered that the respondent pay the applicant’s costs in an assessed sum. When my decision was handed down, those representing the applicant informed me that they wished to make an application for the payment of indemnity costs on the ground that they had on 27 April 2009 made what they described as an offer of compromise under O 23 of the Federal Court Rules. The offer of compromise is set out below:
“APPLICANTS OFFER OF COMPROMISE
…
TAKE NOTICE that:
1. The Applicant Offers to Compromise the whole of this proceeding on the basis that the Court:
a.A WRIT OF CERTIORARI issue, quashing the purported decision subject of the proceeding made under section 415 of the Act by the Second Respondent (“Tribunal”), dated 12 June 2007 (“Decision”).
b.A WRIT OF MANDAMUS directed to the Tribunal issue, requiring the Tribunal to determine according to law the application made to it by the Applicant seeking review of the decision of the delegate of the First Respondent (“Minister”) made on 8 May 2007.
c.A WRIT OF PROHIBITION directed to the Minister issue, prohibiting him or his delegates, servants or agents from acting upon or giving effect to the decision.
d.Each pay party [sic] its own costs.
2.This Offer of Compromise is open to be accepted by the Respondents for 14 days after service of the same.
3.This Offer of Compromise is made under Order 23 of the Federal Court Rules (Cth).”
In the accompanying letter, said to be “without prejudice save as to costs” the applicant’s solicitors write:
“27 April 2009
Mr Andras Marcus
[address provided]Dear Andras
[SZMJQ] v Minister for Immigration & Citizenship and Refugee Review Tribunal (SYG 883/2009)
As you are aware the above named Applicant was granted leave to discontinue the related High Court proceedings (S484 of 2008).
Your client would have now had the chance to consider the further submission we filed in the High Court proceeding. That submission addresses the substance of the grounds raised by the Applicant in the newly commenced Federal Magistrates court proceeding.
For those reasons, we assert that the Applicant is likely to succeed at final hearing in the present Federal Magistrate proceeding.
On this basis we enclose herewith an Offer of Compromise (“Offer”), made under Order 23 of the Federal Court Rules. The Offer essentially seeks your client’s consent to the Applicant being granted the relief sought on the basis that the Applicant does not seek an order for costs.
In this regard, we refer you to Meka v The Shell Company of Australia Ltd (No. 2) [2005] FMCA 700 at [7], in which Driver FM accepted that Order 23 was applicable in Federal Magistrates Court proceedings.
In the event that you do not accept the enclosed Offer, and the Applicant is successful, we will apply for an order for costs in accordance with Order 23 rule 11(4) of the Federal Court Rules – i.e. on a party and party basis up to and including the date of Offer, and on an indemnity basis from this date onwards.
Kindly call me on [number provided] if you have any queries.
Your Sincerely
Farid Varess
…”
The respondent did not take up the applicant’s offer and the case was heard before me. There were three grounds of the application all of which were pursued at hearing. I found in favour of the applicant in relation to the first but not in relation to the second or the third.
There is no doubt that O 23 of the Federal Court Rules applies to proceedings in the Federal Magistrates Court pursuant to rule 1.05 and Schedule 3 Part 2 of the Federal Magistrates Court Rules 2001. The matter was considered by Driver FM in Meka v The Shell Company of Australia Ltd (No.2) [2005] FMCA 700 where his Honour confirmed that the Order did apply. Order 23 is in the following form:
“Order 23 Offer of compromise and payment into court
1 Interpretation
In this Order, unless the contrary intention appears:
applicant includes cross-claimant.
claim in the proceeding includes a claim in relation to costs to
which Order 62 applies.
proceeding does not include a proceeding on an interlocutory application that is not capable of:
(a) substantially disposing of the proceeding or of the whole or any part of any claim for relief in the proceeding; or
(b) rendering unnecessary any trial or further trial in the proceeding or of the whole or any part of any claim for relief in the proceeding.
respondent includes cross-respondent.
2 Application
(1) In any proceeding, a party may make to another party an offer to compromise any claim in the proceeding on the terms set out in the notice of offer.
(2) If an offer to compromise the separate claims of several parties to the proceeding is in a single notice of offer, the notice of offer must specify separately the offer made to each party.
3 Form of offer
(1) An offer of compromise is made to a party by serving a notice of the offer on the party.
(2) A notice of offer must:
(a) be prepared in accordance with Order 41; and
(b) bear a statement to the effect that the offer is made under this Order; and
(c) be signed by the party making the offer or by the solicitor appearing for that party.
(3) Until an offer has been accepted, notice of the offer must not be filed.
4 Further requirements of offer
(1) If:
(a) a sum of money is offered; and
(b) that sum is inclusive of the costs of the proceeding; the notice of offer may specify the amount that is in respect of costs.
(2) If:
(a) a sum of money is offered; and
(b) that sum is inclusive of interest; the notice of offer must specify the amount that is in respect of interest and how it is calculated.
(3) An offer to pay a sum of money is, unless a notice of offer otherwise provides, taken to be an offer to pay that sum within 28 days after acceptance of the offer.
5 Time for making or accepting offer
(1) An offer may be made at any time before the time prescribed by subrule (7) in respect of the claim to which it relates.
(2) A party may make more than one offer.
(3) An offer may be expressed to be limited as to the time that it is open to be accepted, but the time expressed must not be less than 14 days beginning on the day after it is made.
(4) An offeree may accept an offer by serving notice of acceptance in writing on the offeror before:
(a) the expiration of the time specified in accordance with subrule (3); or
(b) the time prescribed by subrule (7) in respect of the claim to which the offer relates; which ever time is sooner.
(5) An offer must not be withdrawn within 14 days after it is made,
unless:
(a) the Court otherwise orders; or
(b) the offer is replaced by an offer in terms more favourable to the offeree.
(6) An offer is open to be accepted within the period referred to in subrule (4) despite the fact that during that period the party to whom the offer is made makes a counter-offer, whether or not the counter-offer is made in accordance with this Order.
(7) The time prescribed for the purposes of subrules (1) and (4) is:
(a) if the trial is before a jury — when the judge begins to sum up to the jury; or
(b) in any other case — when the Court, registrar or taxing officer pronounces the decision or begins to give reasons for the decision.
6 Withdrawal of acceptance
(1) A party who accepts an offer may, by serving a notice of withdrawal on the offeror, withdraw the acceptance:
(a) if:
(i) the offer provides for payment of a sum of money;
and
(ii) the sum is not paid to the offeree or into Court:
(A) within 28 days after the acceptance of the
offer; or
(B) within such other time as the offer provides;
and
(iii) the notice of withdrawal is served within 7 days after the expiration of the relevant period; or
(b) if the Court gives leave to do so.
(2) On withdrawal of an acceptance, all steps in the proceedings taken in consequence of the acceptance have effect only as the Court may direct.
(3) On withdrawal of an acceptance or on the motion for leave to withdraw an acceptance, the Court may:
(a) give directions under subrule (2); and
(b) give directions for restoring the parties as nearly as may be to their positions at the time of the acceptance; and
(c) give directions for the further conduct of the proceedings.
7 Offer to be without prejudice
An offer made in accordance with this Order is taken to have been made without prejudice, unless the notice of offer otherwise provides.”
In order to decide whether this offer is one to which O 23 should apply, it is necessary to consider the following:
a) Is the offer complete?
b) Is the offer truly an offer of compromise?
c) Are offers of compromise by way of calderbank letter or offers pursuant to O 23 capable of being made to have effect in public law proceedings, specifically, proceedings under the Migration Act.
Is the Offer complete?
The offer sets out a form of orders which the applicant asks the respondent to agree to and the Court to make. The orders are necessarily consent orders. As early as 1999, French J, as he then was, considered in Kovalev v Minister for Immigration (1999) 100 FCR 323 the requirements of a minute of consent orders in relation to an application made under the Act. The reasons for his Honour’s decision were prepared in order to give substance to his Honour’s view, communicated to the parties, that he was not prepared to make an order unless and until the following conditions were met:
“(i) The error of law grounding the decision to set aside the Refugee Review Tribunal’s decision and which it was required to address by order of the Court be specified in the proposed order.
(ii) The Court was satisfied that there was a proper basis for setting aside the decision and remitting it to the Refugee Review Tribunal.”
The relevant part of his Honour’s reasons commences at [7]:
“In making a consent order the Court exercises judicial power. This is a power conferred upon it by the Parliament under Ch III of the Constitution of the Commonwealth. Its exercise is a public function and operates to bind the parties. Its public character applies to agreed orders disposing of private litigation between citizens or corporations and proceedings brought by or against governments and their agencies or public authorities.”
And continued at [9]:
“There is a fundamental difficulty where a court makes an order remitting a matter to a decision-maker or tribunal to be decided "according to law" and the court itself is not informed of the nature of the error conceded. The court is then making an order without being apprised of its basis and proposed operation. To do so in my opinion is a purported, but not an actual exercise of judicial power. Moreover, in a practical sense the decision-maker or tribunal lacks the benefit of any binding direction from the court as to precisely what it is that the decision-maker or tribunal is required to do. In the present case the precise concession which led to the proposed consent order had not been communicated by the respondent to the applicant. The possibility arose that the matter could have been remitted to the Tribunal with the parties themselves not being ad idem as to the error of law which had led to the decision being set aside and which the Tribunal was required to rectify. And even if there had been such an agreement the terms of the order proposed would not have disclosed to the public what the parties had agreed should be its content. In the particular case where a tribunal decision is set aside, the Tribunal itself is not usually a party and has played no role in the negotiation of the agreement that it erred in law. A fortiori in that case the order must be clear and complete and the Court must be satisfied that it is appropriate.”
His Honour then made reference to the decision of Blackburn J in National Bank of Australasia Ltd v Sonar (1977) 28 FLR 372 and noted that Blackburn J drew a distinction between cases where the parties agreed by themselves to compromise their differences and a Court order:
“In such a case the proceedings can be discontinued and there is no publication of the terms of the compromise. This is no contravention of the principal of open court; it simply means that since the parties have ceased to resort to the court for the resolution of their differences, the terms of the compromise are only enforceable as a contract and not by way of a court’s process.”
Orders such as those sought by the applicant which are in the nature of constitutional writs cannot possibly be the subject of enforcement as a contract. Neither the Minister nor the Refugee Review Tribunal has the power to order constitutional writs. Only a Court has that power. It is thus clear that in a case such as this there is no room for a private compromise. There can only be a Court order and that order can only be made if the conditions set by French J are complied with. So much was affirmed by Young J in CEO of Customs v Biocontrol Ltd (2006) 150 FCR 64 at [16]:
“The proposed consent orders relate to a matter of public law, and would involve setting aside a carefully reasoned decision of the Tribunal. It would be inappropriate for me to accede to the orders that have been sought simply because they are consent orders without satisfying myself that the Tribunal in fact erred in law and the correct tariff classification of the goods is under subheading 3808.10.90. Further if I were to be so satisfied, I also consider that I should identify the error of law by the Tribunal which founds the orders I am asked to make.”
His Honour then quotes extensively from Kovalev and notes a series of other cases in which those principles have been approved.
The consent orders which were offered by the applicant to the respondent as a form of compromise did not contain details of the error of law grounding the decision to set aside the Tribunal’s decision. The application, which had been filed on 16 April some 11 days before the offer, contained the three grounds of application to which I have previously referred. The letter of 27 April does not distinguish between the grounds so that it could not be said that the respondent could have been aware that the note which normally accompanies these consent orders would make reference to any one or all of the grounds of application. Given the essential nature of the requirement to have such a note in the consent orders, it is my view that the offer was incomplete insofar as it was not capable of acceptance as it stood because the full terms of the draft order had not been set out.
Is the offer truly an offer of Compromise?
It is well established that cost consequences apply only where an offer of compromise represents what the Court construes as a genuine attempt at compromise (see G E Dal Pont, Law of Costs, 2nd ed (2009), 13.7). This principle applies whether the offer is made for the purposes of a Calderbank letter of offer or an offer of compromise under the rules of Court: Uniline Australia Ltd v SBriggs Pty Ltd (No. 2) [2009] FCA 920.
In Uniline the applicant sought a declaration that threats of patent infringement proceedings made by the respondent were unjustifiable, injunctions to prevent further threats and damages arising out of those threats. In its cross claim, the respondent sought a declaration of patent infringement, an order for delivery up of all infringing products and damages. In a further cross-claim the applicant contended that the respondent’s patent was invalid. In the principal application, the applicant succeeded and obtained declarations in relation to the threats and the injunctions sought. The respondent’s cross claims relating to patent infringement were dismissed. The applicant sought costs on an indemnity basis, relying on an offer it had made under O 23 of the Federal Court Rules. In that letter, the applicant offered to discontinue its claims and pay its own costs in return for the respondent promising to discontinue its cross claims.
The applicant in the instant case seeks to rely on the following passage from Uniline at [38]:
“Costs are incurred in a recoverable inter-parties sense from the moment the proceedings issue and they continue to be incurred at every point along the continuum of the litigation. Litigants who are required to pay these costs in order to assert or resist a claim, regard them as a very real and present expense, if not a real and present danger. Very often these costs are a significant business expense. They invariably require a commitment of significant resources and separate budget allocations. An offer to compromise which is framed in terms of a party’s willingness to abandon the recovery of costs so incurred along that continuum through the preparation and analysis of statements, disclosure, analysis of documents and the preparation and review of expert reports, is undoubtedly considered by the litigant as an offer that involves giving up something meaningful, real and measurable. This is particularly so after the completion of case managed preparatory steps at various phases of the litigation which may have the effect of front-end loading significant costs in order to save trial costs.” [emphasis in applicant’s written submissions]
The applicant interprets this passage as authority for the statement that an offer to a respondent to concede a matter with no costs order being made represents a genuine offer of compromise. However, the applicant in that case had offered to compromise more than simply its entitlement to costs. It was prepared to discontinue its application and its further cross-claim for relief arising out of the contended invalidity of the patent. In the instant case, the applicant made no such offer. By virtue of the nature of the administrative law applications, it could make no such compromise.
The fact that the applicant had offered to discontinue its claims in Uniline may explain why Greenwood J did not refer in his decision to other Federal Court authorities which make it clear that an invitation to an applicant to discontinue with no order as to costs is not a genuine offer of compromise; Vasram v AMP Life Ltd [2002] FCA 1286 at [12]; ACCC v Universal Music Australia Pty Ltd (No 2) [2002] FCA 192 at [60]. Those authorities had no application to the decision in Uniline but I see no reason why they would not apply to the current situation where an applicant has offered to pay its own costs in return for complete capitulation by the respondent.
In any event, the decision in Uniline was made in the context of commercial litigation and specifically intellectual property. The sentence prior to the quote extracted by the applicant above makes this point:
“In the modern world of commercial litigation and various subsets of that litigation such as intellectual property litigation, costs are a very real and quantifiable concern. It would be extremely odd to think otherwise.”
While it would be wrong to suggest that costs in administrative law matters are not a genuine concern for litigants, it may be that their significance as a tool for compromise is not so great.
Are Offers of Compromise effective in public law matters?
Whilst I would have real doubts as to whether offers of compromise are appropriate to public law cases generally noting that Beaumont J said in Kapeleris & Ors v Bytenet Pty Ltd [1997] FCA 1005:
“The nature of the Court’s jurisdiction and its special character, I think, serves to emphasise that the whole notion of an offer of compromise which underlies O 23 is peculiarly adapted to the case of truly private litigation. I do not see an application for winding up easily assuming that character.”
And see also Franks v Warringah Council, in the matter or Franks [2003] FCA 1254 per Branson J at [5]. I think that this Court should concentrate its views on the particular public proceedings in hand; that is applications under the Migration Act. There is nothing private about this litigation. The only orders that can be sought are constitutional writs requiring a government created independent Tribunal to hear and determine the matter according to law. Whilst the parties may agree that it is appropriate that such orders be made, it is for the Court to be satisfied of that fact. If O 23 was to apply then those representing the respondent could issue offers of compromise that contained consent orders for the dismissal of the proceedings on payment by the applicant of an amount less than the scale costs. If the applicant declined the offer the Minister would be entitled to indemnity costs. To permit this would make nonsense of the fixed costs scales set out in Schedule 1 of the Federal Magistrates Court Rules 2001. These are not proceedings that lend themselves readily to compromise. This is particularly so when the final word lies not with the parties but with the Court.
The applicant has failed to establish that his offer of compromise is complete. He has failed to establish that the offer is a true compromise and he has not satisfied me that offers of compromise are appropriate in proceedings under the Migration Act. The application fails and the applicant should pay the respondent’s costs thereof which I assess in the sum of $2,000.00, such costs to be deducted from the amount payable to the applicant pursuant to my orders of 30 October 2009.
I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date: 24 November 2009
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