AZC20 v Minister for Home Affairs

1. The respondents pay the applicant's costs of proceeding VID 503/2021.
2. The costs of proceeding VID 89/2021 be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

RANGIAH J: 1 The applicant commenced proceeding VID 89/2021, applying for a writ of habeas corpus and other relief. The application for habeas corpus was separated and heard in advance of the application for other relief. After I had reserved my judgment upon the habeas corpus application, the High Court delivered its judgment in Commonwealth of Australia v AJL20 [2021] HCA 21; (2021) 391 ALR 562. 2 The applicant then commenced proceeding VID 503/2021, applying for mandamus and ancillary relief. That application was heard together with further argument upon the habeas corpus application. 3 On 13 October 2021, I delivered judgment in AZC20 v Minister for Home Affairs [2021] FCA 1234. The applicant's application for habeas corpus in proceeding VID 89/2021 was dismissed. The applicant's application for mandamus and ancillary relief in proceeding VID 503/2021 was successful. 4 In my reasons for judgment, I indicated a preliminary view that the respondents should pay the applicant's costs of proceeding VID 503/2021; and that the costs of the application for habeas corpus in proceeding VID 89/2021 should be reserved as that proceeding has not yet concluded. 5 I ordered that the parties file and serve any submissions as to costs, and ordered that any question of costs be decided on the papers. 6 The parties have each filed submissions seeking to persuade me to depart from my preliminary view. 7 The applicant seeks an order that the respondents pay the applicant's costs of both proceedings VID 503/2021 and VID 89/2021 on an indemnity basis. 8 The respondents submit that in circumstances where the applicant intends to continue with proceeding VID 89/2021, the appropriate course is to reserve the costs of both proceedings until final determination of proceeding VID 89/2021. The respondents contend, in the alternative, that the applicant should pay the respondents' costs of the application for habeas corpus in proceeding VID 89/2021, and that the respondents should pay the applicant's costs of the mandamus application in proceeding VID 503/2021. 9 In my view, the orders for costs in proceeding VID 503/2021 ought to be dealt with now since that proceeding has been finalised. I cannot see any utility in reserving the costs of proceeding VID 503/2021 until the completion of proceeding VID 89/2021. 10 The applicant submits that there are five special or unusual features of the litigation which mean that the respondents should pay the costs of both proceedings on an indemnity basis. Those matters are said to be: (1) On the issues which took the vast bulk of the legal costs of the Applicant, he was totally successful, and the Respondents' position was untenable and unsupported by any authority. (2) The Respondents' resistance to the applications in this case compounded an egregious breach of statutory duty and directly prolonged the detention of the Applicant. (3) The Respondents breached every single order requiring action by them and engaged in litigation ambush on three separate occasions… (4) The above are of amplified significance where the Respondents are supposed to be model litigants. (5) The Applicant was represented by lawyers engaged by reason of a Court referral. 11 Under s 43(2) of the Federal Court of Australia Act (1976) (Cth), the Court has a discretionary power to award costs. Costs may be awarded on a party and party basis, or on an indemnity basis: see also r 40.02 of the Federal Court Rules 2011 (Cth). 12 In TSG Franchise Management Pty Ltd v Cigarette & Gift Warehouse (Franchising) Pty Ltd (No 3) [2016] FCA 828, Davies J at [7] succinctly described the circumstances in which indemnity costs may be ordered: It is well-settled law that indemnity costs should not be ordered unless there is some special or unusual feature of the case that justifies departure from the ordinary practice: Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225; [1993] FCA 801 at 230-234 (FCR); Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151; [1996] FCA 1942 at 152-153 (Black CJ) and 156-158 (Cooper and Merkel JJ) (FCR). In Hamod v New South Wales (2002) 188 ALR 659; [2002] FCA 424 at 665 (ALR) (per Gray J, Carr and Goldberg JJ agreeing), the Full Court explained the principle for an award of indemnity costs in the following terms: Indemnity costs are not designed to punish a party for persisting with a case that turns out to fail. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the Court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs. The cases illustrate the appropriateness of awarding costs on an indemnity basis where there has been particular misconduct that caused a loss of time to the Court and to other parties, where proceedings were commenced or continued in wilful disregard of known facts or clearly established law, where allegations were made which ought never to have been made, or where the proceeding was unduly prolonged by groundless contentions… 13 The applicant's submission that the respondents should pay the applicant's costs of proceeding VID 503/2021 on an indemnity basis represents a substantial overreach. Contrary to the applicant's submissions, the respondents' argument was not untenable. Nor I do accept that the respondents' resistance to the application, "compounded an egregious breach of statutory duty". The respondents' error seems to have arisen, at least in part, from a misconstruction of the relevant statutory scheme. Even though the respondents' construction was ultimately rejected, it was not unreasonable to defend their arguable construction. 14 It is true that the respondents failed to comply with several orders of the Court. It should certainly be accepted that such conduct was undesirable and unacceptable, particularly for model litigants. However, it is difficult to see that the respondents' non-compliance could have resulted in any significant additional costs for the applicant. Indemnity costs are awarded as compensation, not punishment. 15 The fact that the applicant's lawyers were engaged through referral by the Court for pro bono assistance, and that they then entered into a conditional costs agreement, is irrelevant. Costs are not awarded on an indemnity basis to reward lawyers who agree to take up a pro bono referral. 16 The appropriate order in proceeding VID 503/2021 is that the respondents pay the applicant's costs of that proceeding on a party and party basis. 17 In proceeding VID 89/2021, the respondents submit that there is no basis for departing from the usual rule as to costs with respect to the applicant's failed claim for habeas corpus. They submit that the mere fact that the applicant might have had a basis to seek such relief by virtue of the judgment of a single judge of the Federal Court in AJL20 v Commonwealth of Australia (2020) 279 FCR 549 is not an appropriate reason for departing from the usual rule. 18 Those arguments may well be sound, but the difficulty is that proceeding VID 89/2021 has not yet been completed. It cannot confidently be predicted that the outcome in relation to the remaining issues in that proceeding will have no influence upon the appropriate order as to costs in respect of the habeas corpus application. The costs of the habeas corpus application should be reserved for determination at the conclusion of proceeding VID 89/2021. 19 Accordingly, I will make orders in accordance with the preliminary views I expressed in my previous reasons for judgment. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rangiah.