Xu v Minister for Immigration and Citizenship (No 2)
[2025] FedCFamC2G 1049
•7 July 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Xu v Minister for Immigration and Citizenship (No 2) [2025] FedCFamC2G 1049
File number: MLG 3582 of 2020 Judgment of: JUDGE GOSTENCNIK Date of judgment: 7 July 2025 Catchwords: MIGRATION – costs – indemnity costs – costs sought above scale – Calderbank offer by applicants – costs awarded to the applicants above scale amount Legislation: Migration Act 1958 (Cth)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) sch 2, div 1, pt 2, item 3
Cases cited: Chief Executive Officer of Customs v Biocontrol Ltd [2006] FCA 107, 150 FCR 64
FJS18 v Minister for Immigration, Citizenship and Multicultural Affairs [2024] FCA 433
Gehlert v Minister for Immigration and Multicultural Affairs [2024] FCAFC 129, 305 FCR 172
Kovalev v Minister for Immigration & Multicultural Affairs [1999] FCA 557, 100 FCR 323
Xu v Minister for Immigration and Citizenship [2025] FedCFamC2G 809
Division: Division 2 General Federal Law Number of paragraphs: 24 Date of last submission/s: 11 June 2025 Date of hearing: 2 June 2025 Counsel for the Applicants: Ms G Costello KC and Dr A McBeth Solicitors for the Applicants: Verge Legal Counsel for the First Respondent: Mr M Fisher Solicitor for the First Respondent: Australian Government Solicitor Counsel for the Second Respondent: Submitting appearance, save as to costs ORDERS
MLG 3582 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: LEI XU
First Applicant
XIAOLIN SUN
Second Applicant
AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP
First Respondent
ADMINISTRATIVE REVIEW TRIBUNAL
Second Respondent
ORDER MADE BY:
JUDGE GOSTENCNIK
DATE OF ORDER:
7 JULY 2025
THE COURT ORDERS THAT:
1.The first respondent pay the applicants’ costs fixed in the sum of $15,927.34.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
Judge Gostencnik
On 2 June 2025 I delivered judgment in favour of the applicants in connection with their judicial review application. I concluded that the decision of the (then) Administrative Appeals Tribunal (Tribunal) the subject of the judicial review application was attended by jurisdictional error: Xu v Minister for Immigration and Citizenship [2025] FedCFamC2G 809 and I ordered, inter alia, that the Tribunal’s decision be quashed and the application for review be remitted to the Administrative Review Tribunal for determination according to law.
Costs were reserved and as the parties have been unable to agree on a fixed sum of costs that should be awarded to the applicants, they have filed and exchanged written submissions addressing their respective positions.
The applicants seek an award of costs fixed in the sum of $20,400.00. This comprises $18,000.00 as at the date of judgment delivery, which the applicants say represents approximately 60% of their actual costs and disbursements in the proceeding. In addition, there is a sum of $2,400.00 for costs incurred arising from the need for written submissions on costs and correspondence between the parties on the issue of costs after judgment. It is uncontroversial that costs should follow the event in this matter.
Relevantly, item 3 of Div 1, Pt 2 of Sch 2 to the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) fixes a sum of $8,371.30 for a migration proceeding which, as here, is concluded at final hearing. The scale amount is not a default, nor do the applicants need to show that a departure from the scale amount is justified or warranted: Gehlert v Minister for Immigration and Multicultural Affairs [2024] FCAFC 129, 305 FCR 172 at [70]. In assessing the costs amount that should be fixed, the Court will assess that which is fair and just, given the actual costs incurred: Gehlert at [76]. Put another way, if the Court is put in a position to do so it should assess what amount would represent a fair indemnity for the costs that the successful party has incurred: FJS18 v Minister for Immigration, Citizenship and Multicultural Affairs [2024] FCA 433 at [59]. So much is not in dispute.
The applicants’ solicitors wrote to the first respondent’s solicitors on 27 March 2025 relevantly stating:
2.In the interest of avoiding wasting further costs, we are instructed to make the following offer:
(a) A writ of certiorari issue directed to the Respondents quashing the decision of the Tribunal dated 15 September 2020.
(b) A writ of mandamus issue directed to the Tribunal, differently constituted, requiring it to determine the Applicants’ application according to law.
(c) The First Respondent pay the applicant’s (sic) costs, fixed in the sum of $4,000.
3. Our client makes this offer in a genuine attempt to settle this dispute. If your clients fail to accept this offer and insists on proceeding with the hearing and/or seeking a costs order, and obtains an outcome that is similar or less favourable to the terms of this offer, our client reserves the right to rely on this letter on the question of costs on an indemnity basis.
4. This offer remains open for acceptance until 8:00 AM on Monday, 31 March 2025, after which it will lapse and no longer be available for acceptance. Following that time, our client will proceed with preparation for the hearing, including the preparation of any amended application, any supplementary court book and written submissions as required by the Orders made on 5 May 2021.
5. We note that our client’s offer is made in accordance with the principles enunciated in Calderbank v Calderbank (1975) 3 ALL (sic) ER 333 and Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No. 2) (2005) 13 VR 435.
On 2 April 2025 the applicants’ solicitors again wrote to the first respondent’s solicitors substantially in the same terms as set out above save that [2(c)] proposed costs in the sum of $3,000 and [4] provided:
4.This offer remains open for acceptance for 14 days from this letter, i.e. until 5PM on 16 April 2025, after which it will lapse and no longer be available for acceptance.
In consequence, the parties are in dispute about whether the applicants are entitled to indemnity costs after the date of either of the above letters and about the amount that is fair and just considering the actual costs and disbursements incurred by the applicants.
The actual costs and disbursements the applicants say they incurred up to the date of judgment is a total of $29,891.50. According to the invoices attached to the affidavit of Rou Zhuang Anthia Tan sworn on 11 June 2025 from the firm of solicitors engaged by the applicants, the total costs including Court fees and attendance at judgment delivery amount to $33,884.50. Excluding the Court fees, costs incurred amount to $32,224.50.
In short compass, the applicants contend that the orders the Court made save for costs were precisely the same as sought by the applicants in their judicial review application and in letters described above, and as the first respondent refused the applicants’ offers, they are now entitled to seek indemnity costs from at least the date the second offer expired, being 16 April 2025. They also contend that as the first respondent was on notice that the applicants would seek to be indemnified of any costs needlessly incurred after the point where the first respondent refused the applicants’ invitation to concede, that is relevant to the exercise of the Court’s costs discretion in deciding, whether expressed as indemnity costs arising from Calderbank or not, what is fair and just, given the actual costs incurred. The applicants say that of the costs actually incurred by them ($29,891.50), nearly half ($14,349.00), was incurred after the date for acceptance of the applicants’ second offer passed (16 April 2025). The applicants contend that either on Calderbank principles, or alternatively as a fair indemnity for the costs actually and reasonably incurred by the applicants, they are entitled to recover $14,349.00 in full and as earlier noted they claim a total amount of $18,000.00 to the date of judgment.
The applicants also contend that the additional costs incurred by them in preparing written submissions on costs were incurred because the first respondent was not prepared to make oral submissions on the day judgment was delivered. They say it is fair and just that the applicants recover the full amount incurred in relation to the costs dispute – said to be $2,400.00.
The first respondent says there is no basis for an order of costs on an indemnity basis for several reasons. First, because the applicants’ offers were not complete as neither letter from the applicants’ solicitors specified the basis on which the orders sought should be made. Second, because the applicants’ offers were not a genuine attempt at compromise. Third, because the principles concerning Calderbank offers and offers of compromise can have no application in purely public law proceedings such as judicial review applications under the Migration Act 1958 (Cth). Fourth, because the first respondent’s non-acceptance of the offers was not unreasonable as the applicants did not state the basis on which they proposed that the proceeding be conceded and the first respondent’s defence of the proceeding, although not accepted by the Court, was reasonably arguable.
I agree with the first respondent that costs on an indemnity basis should not be awarded. As the first respondent has correctly observed, the applicants’ offers merely proposed orders quashing the Tribunal’s decision and remittal requiring a differently constituted Tribunal to determine the applicants’ application according to law. But as French J observed in Kovalev v Minister for Immigration & Multicultural Affairs [1999] FCA 557, 100 FCR 323 an order disposing of a proceeding by consent must be self-explanatory and it is not appropriate to make an order of uncertain content: at [8]. Moreover, there is a fundamental difficulty in 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. And in a practical sense, the Tribunal to which the application is remitted lacks the benefit of any binding direction from the Court as to precisely what it is that the Tribunal is required to do: at [9].
The applicants’ proposed orders suffered from this vice. Neither letter set out the jurisdictional error the applicants sought the first respondent’s concession that the Tribunal made. The judicial review application and the applicants’ submissions filed on 2 April 2025 asserted 3 grounds of error. Were the applicants requesting the first respondent concede all or just some or only one of the grounds? If only some or one, then which one? This cannot be discerned from the letters which are silent on the topic. Moreover, it is to be remembered that at the hearing, having had the benefit of reviewing the first respondent’s submissions, the applicants properly did not press their third ground.
Consequently, I consider the applicants’ offer in each letter was incomplete. Neither was capable of acceptance on its face because the full terms of the proposed order had not been set out – there being no indication of the nature of the jurisdictional error made by the Tribunal which the applicants sought the first respondent concede.
Additionally, and to repurpose the observations of Young J in Chief Executive Officer of Customs v Biocontrol Ltd [2006] FCA 107, 150 FCR 64 at [16], the applicants’ proposed consent orders related to a matter of public law involving setting aside a decision of the Tribunal, and it would be inappropriate for the Court to accede to the proposed orders simply because they are sought by consent. The Court first needs to be satisfied the Tribunal in fact erred and then identify the error made by the Tribunal which founds the orders. Accordingly, orders in the form proposed without any elucidation of the jurisdictional error made by the Tribunal would not have been made and so allowing the offers to lapse as the first respondent did was not unreasonable in the circumstances.
This provides a sufficient and proper basis to refuse to award costs on an indemnity basis.
Turning then to the question what is a fair and just award of costs, given the actual costs incurred.
The first respondent contends the Court should make an order that compensates the applicants to a level that is fair and just in the circumstances and that the appropriate order is to fix costs in the sum of $8,371.30. The first respondent says the proceeding was not complex, the applicants’ third ground of review was appropriately abandoned, and the proceeding otherwise involved the application of settled principles to competing interpretations of the Tribunal’s reasons. The first respondent also points to the fact that the Court Book comprised only 171 pages; the Tribunal’s reasons comprised only 7 pages; the procedural history was unremarkable; the parties each filed only a single set of submissions; and the single court date (the final hearing) requiring the attendance ran for a little over an hour. The first respondent also says that the applicants’ electing to engage senior and junior counsel does not entitle them to recover all of those costs incurred merely because they were successful.
In addition to the applicants’ contentions about the quantum of costs that should be awarded already canvassed, the applicants say that the first respondent’s assertion that the matter was not unusually complex does not disentitle the applicants to a fair indemnity. True, but an assessment of what is fair and just, given the actual costs incurred necessarily involves assessing the costs incurred having regard to the nature of the proceeding and its complexity and considering whether the actual costs incurred were reasonable in the circumstances.
The applicants also point to the fact that the first respondent does not allege that the amounts charged by the applicants’ practitioners were unreasonable. This is true insofar as the first respondent does not quibble with any particular amount charged by the applicants legal practitioners, but as already noted, the first respondent takes issue with the awarding of costs incurred for two counsel, which, having regard to the first respondent’s lack of complexity contention is plainly directed to the reasonableness or necessity of the costs incurred by reason of that action.
In the circumstances of this case having regard to its history and complexity, I do not consider the case warranted the involvement by the applicants of both senior and junior counsel. It appears from the materials annexed to the Tan affidavit that senior counsel was engaged in 2020 whilst junior counsel appears to have been engaged this year. Why the engagement of additional counsel was thought necessary is not explained. But whilst decisions about who and how many lawyers to engage in connection with this proceeding were matters for the applicants, they cannot expect, just because they were successful, to be indemnified in whole or in part for such decisions if the nature and complexity of the proceeding does not warrant such high-level involvement. I agree with the first respondent that the proceedings were neither overly complex nor lengthy. I also do not consider that the proceedings warranted the engagement by the applicants of additional counsel earlier this year. Accordingly, I consider that costs incurred because of the engagement and involvement of junior counsel should not be factored into my assessment. This includes the costs incurred by the applicants’ solicitors and by senior counsel in briefing and conferring with junior counsel as disclosed from the invoice materials attached to the Tan affidavit.
In the circumstances, I consider that which is fair and just, given the actual costs incurred should be determined as follows. First, taking the actual costs and including cost incurred on the date of judgment ($32,224.50) then deducting junior counsel’s fees and fees incurred in connection with conferring and instructing junior counsel ($7,095.00). This leaves a balance of $25,129.50. Second, deducting from the balance 20% on account of the abandonment of ground three, which formed part of the applicants’ submissions filed before trial and to which the first respondent was required to respond, leaving a remainder of $20,103.60. Third, calculating 65% of the remainder, which is $13,067.34. Fourth, adding to this amount the court filing and setting down fees, resulting in an amount of $14,727.34.
And as the first respondent was not able to argue about costs on the day judgment was delivered, I also consider that the applicants should recover 50% of the $2,400.00 of costs incurred in preparing the written submissions, noting that their submissions for a form of indemnity costs have not been accepted. Accordingly, to the earlier total will be added $1,200.00.
Disposition
The first respondent will be ordered to pay the applicants’ costs fixed in the sum of $15,927.34.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Gostencnik. Associate:
Dated: 7 July 2025
0
6
2