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[2025] NSWCA 245
respondent. Appeal dismissed. The appellant is to pay the second respondent's costs of the appeal ([48]).
The Court of Appeal upheld the Secretary's decision to pay $188,172.20 rather than the $419,976.07 assessed as the maximum amount of reasonably incurred costs. The Act lets the Secretary choose an amount up to that maximum; it does not require payment of the maximum or confine lower payments to exceptional cases. Applying the published Attorney General's rates was not shown to be legally unreasonable in the circumstances. The appeal was dismissed with costs.
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2,315 words · generated 06/10/2026
EFG was charged in 2019 with three counts of sexual intercourse without consent and one count of attempted sexual intercourse without consent. He pleaded not guilty and was acquitted after a District Court trial in May 2022 ([7]). The trial judge later granted him a certificate under the Costs in Criminal Cases Act 1967 (NSW) (the Costs Act). The certificate followed findings that the matters relied on, considered together, met the statutory criterion in s 3(1)(a), and that EFG had not contributed by any act or omission to the institution or continuation of the proceedings under s 3(1)(b) ([8]).
8 cited instruments linked from this judgment.
The certificate did not itself determine the amount payable. Under s 4(1), a certificate holder may apply to the Secretary for payment from the Consolidated Fund. Section 4(2) permits the Secretary, if satisfied that payment is justified, to determine the amount of costs to be paid, subject to the maximum in s 4(3). That maximum is based on the costs the Secretary considers would reasonably have been incurred, less relevant amounts received or recoverable independently of the Act ([9]).
EFG applied for $515,423.66. The Secretary used a two-stage assessment. First, the Secretary identified $419,976.07 as the maximum amount of costs reasonably incurred. Second, the Secretary moderated the amounts for those costs using the Attorney General's payment rates for solicitors and counsel. The resulting payment was $188,172.20 ([10]-[11]). EFG did not challenge the first-stage assessment of the maximum amount in the judicial review proceedings; his challenge concerned the second stage ([12]).
EFG argued that applying the rates, and paying substantially less than the maximum amount assessed, was legally unreasonable. He also argued that the Act's purpose required a more complete indemnity, and that the Secretary should have continued a former practice said to assess costs by civil party-and-party principles. The primary judge rejected the review application. On appeal, EFG contended that the primary judge had inadequately identified the Act's purpose, misconstrued s 4, and failed to apply the correct legal unreasonableness standard ([3], [13]-[25]).
Mitchelmore JA delivered the principal reasons. Bell CJ and Kirk JA agreed ([1], [49]). The Court dismissed the appeal and ordered EFG to pay the second respondent's costs ([48]).
The appeal turned on what s 4(2) authorises. The Court read the subsection as conferring discretion to determine an amount payable below the maximum in s 4(3). The statutory language says the amount determined must not exceed that maximum; it does not say the maximum must ordinarily be paid ([33]). EFG accepted that the section conferred a discretion to award less but argued that it should be confined to exceptional cases. The Court considered that, if Parliament intended that limitation, it could have expressed it in the section ([34]).
The statutory purpose did not require a different result. The Court accepted that the Act has a beneficial aspect, but rejected the proposition that this meant it must provide full compensation for all costs assessed as reasonably incurred. The statutory cap, and the distinction between the maximum amount and the amount the Secretary determines should be paid, were inconsistent with an ordinary entitlement to full indemnity ([37]). The Court therefore endorsed the primary judge's description of the Act as providing an “element” of indemnity, rather than full indemnity ([37]).
The Court also considered the use of public funds relevant context. The cap itself limits the amount payable, and the decision-making role is assigned to the Secretary, a senior public official, rather than to a court or costs assessor ([38]). This did not replace the statutory text as the basis for construction. Rather, it reinforced why the Act could be understood as balancing assistance to acquitted people against appropriate expenditure of public funds. The Court referred to Carr v Western Australia for the point that a general appeal to statutory purpose may offer little assistance where legislation balances competing interests and the question is how far the provision goes in achieving its purpose ([38]).
On legal unreasonableness, the Court rejected the idea that the Secretary had no need to act reasonably merely because the statute allowed an award below the maximum. The primary judge had first construed the power as permitting a payment below the cap, then assessed whether the Secretary's chosen method was within the legally permissible range ([41]-[42]). The governing standard was that a decision is legally unreasonable when it lacks an evident and plausible justification. The standard depends on the true construction of the statute and a close focus on the circumstances of the decision ([30]).
The Court emphasised that this standard is not a licence for a court to substitute its preferred assessment. A decision is not legally unreasonable merely because a court disagrees with an evaluative judgment that was rationally open to the decision-maker ([31]). Where policy legitimately informs an administrative decision, and where the decision involves discretion, the test is stringent ([31]).
The Attorney General's rates were applied under a published departmental policy. EFG was told of the policy and invited to make submissions. The Court noted that policies may promote consistency and rationality, particularly in repeated or high-volume decision-making, drawing on Plaintiff M64/2015 ([43]). It also considered the evidence that the rates were not invariably applied without adjustment: the Secretary's reasons said higher rates had been used in some assessments, though not in EFG's case ([47]). That the resulting payment was substantially below the assessed maximum did not, by itself, establish legal unreasonableness ([45]).
This judgment did not announce a new statutory regime. It applied established principles of statutory interpretation and legal unreasonableness to s 4 of the Costs Act. The practical clarification is that the amount identified as the statutory maximum under s 4(3) is a ceiling, not an amount that must automatically be paid once reasonably incurred costs are assessed ([33]-[37]).
Before this decision, the statutory mechanism already contained two distinct steps: assessing the maximum amount and deciding what amount should be paid, subject to that ceiling. The Court rejected a construction that would collapse these steps by treating the reasonable-costs figure as the presumptive or required payment except in exceptional circumstances ([33]-[34]). It read the text as giving the Secretary room to determine a lesser payment.
The judgment also restates the legal unreasonableness framework drawn from Minister for Immigration and Citizenship v Li, Minister for Immigration and Border Protection v SZVFW, and Minister for Home Affairs v DUA16. The central question is whether the decision has an evident and plausible justification, assessed by reference to the statute and the particular circumstances. It is not enough to show that another assessment would have been preferable ([30]-[31], [42]).
The Court treated administrative policy as potentially consistent with lawful decision-making, rather than inherently restrictive or arbitrary. It relied on the role policies can play in supporting consistency and rationality, while considering whether the policy was actually inflexible on the evidence ([43], [47]). The reasons do not hold that any published policy, or any particular rate schedule, will necessarily be reasonable in every case. The outcome rests on the statutory wording and the circumstances and evidence before the Court.
The judgment also rejects the use of the label “beneficial legislation” as a shortcut to a preferred construction. A beneficial purpose does not displace the text and context where those do not support the proposed interpretation ([39]). Patton v Mareangareu is cited for the caution that describing legislation as beneficial may distract from the text while offering little assistance in interpreting it ([39]).
At [30], the Court states that a statutory decision is legally unreasonable when it “lacks an evident and plausible justification”. In plain English, the question is not whether a court would have made the same decision. The question is whether the decision has a rational explanation that can be understood in the context of the statutory power and the facts.
Also at [30], the Court says reasonableness is “the standard indicated by the true construction of the statute”. This means the legal test cannot be applied in the abstract. The nature and limits of the particular power matter.
At [31], the Court cautions that legal unreasonableness is not a way to challenge an evaluative decision simply because a court disagrees with it, if the decision was rationally available to the decision-maker. The judgment also notes the stringent character of the test, especially where the power involves discretion and policy choices.
At [33], the Court explains that a power to award costs “not exceeding” a maximum is not naturally read as requiring payment of that maximum. Put simply, the s 4(3) calculation sets an upper limit. It does not, without more, dictate the final amount.
At [37], the Court describes the Act as providing an “element” of indemnity, but not a full indemnity. The plain-English point is that a certificate does not guarantee reimbursement of every cost assessed as reasonably incurred. The payment remains subject to the distinct discretion in s 4(2).
At [43], the Court observes that policies can promote consistency and rationality by helping decision-makers treat like cases alike. That does not establish that every policy is lawful in every application. Here, the policy's use was assessed in its statutory and factual setting.
The decision is most directly relevant where a statutory scheme has two related stages: first, a calculation of a maximum amount by reference to a defined measure, and second, a discretionary decision about the amount actually payable up to that maximum. The reasoning depends on the wording and structure of s 4, so it should not be assumed to decide the meaning of other statutes with different text or purposes ([33]-[38]).
It is also relevant where a person argues that a public decision-maker acted legally unreasonably by applying a published policy or rate schedule. The judgment indicates that the existence of a policy does not itself establish unreasonableness. The policy's statutory fit, the reasons given, the opportunity for submissions, and whether the decision-maker applied it inflexibly may matter ([42]-[47]).
A further relevant pattern is where a person relies on an asserted past administrative practice to challenge a later decision. In this case, the evidence of the former approach was weak, and the applicant had notice of the current policy. The Court did not accept that a change between permissible approaches was, without more, legally unreasonable ([46]).
The precedent is not a general endorsement of all rate schedules, nor a finding that a lower payment is always reasonable. The decision concerns EFG's particular challenge, the structure of the Costs Act, the published policy described in the reasons, and the evidence about how it operated ([42]-[47]).
The supplied judgment is dated 17 November 2025 and contains no account of later judicial treatment of EFG v Secretary, Department of Communities and Justice. It would therefore be unsupported to say whether a later court has followed, distinguished, or criticised this decision.
The judgment itself explains the precedents it applies. It applies Li for the legal unreasonableness standard and the warning against using that standard merely to challenge an evaluative judgment with which a court disagrees ([30]-[31]). It applies SZVFW for the stringent nature of that standard where statutory discretion is involved ([31]). It applies DUA16 for the need to focus closely on the circumstances in which the power was exercised ([30]).
The Court also applies Carr v Western Australia in explaining why a general appeal to statutory purpose may be of limited assistance where a provision balances competing interests ([38]). It cites Plaintiff M64/2015 for the role policies may play in supporting consistency and rationality, and cites Patton v Mareangareu for the caution against letting a broad “beneficial legislation” label displace attention to statutory text ([39], [43]). Those authorities are discussed as sources informing the Court's reasoning in this appeal, not as later treatment of this judgment.
The judgment resolves the challenge before it but leaves questions that would depend on different facts or statutory wording. It does not define a formula for deciding the amount payable below the s 4(3) maximum. Section 4(2) leaves the Secretary to determine the amount that should be paid, and the Court rejected the proposed exceptional-circumstances restriction without setting out an exhaustive list of relevant considerations ([33]-[34]).
The decision also does not establish that the Attorney General's rates are suitable in every application under the Costs Act. It holds that their use in this case was not shown to be legally unreasonable. A future challenge could involve materially different evidence about the rates, their application, the reasons given, or the way relevant case-specific features were considered. The Court's analysis makes the circumstances of exercise important ([30], [42]-[47]).
Nor does the judgment conclusively define how much weight the Secretary must give to the level of expertise required in a particular matter. The primary judge's reasoning, recounted in the appeal judgment, treated expertise as a matter the Secretary could consider. The Court of Appeal's decision was that the appellant had not established legal unreasonableness on the grounds advanced, not that a particular approach to expertise must be taken in every case ([21], [42]-[47]).
Finally, the appeal did not determine the legal effect of a well-evidenced, specific assurance about a future assessment, or a case in which a policy was applied in a way that prevented meaningful consideration of individual circumstances. The Court noted that the case before it did not involve an unfulfilled promise and that the policy was not shown to be inflexible in practice ([23], [47]). The judgment therefore leaves those distinct circumstances to be assessed under the applicable statutory text and administrative-law principles.
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on or relying on this analysis, have a qualified Australian lawyer check it.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: EFG v Secretary, Department of Communities and Justice [2025] NSWCA 245
Hearing dates: 5 November 2025
Date of orders: 17 November 2025
Decision date: 17 November 2025
Before: Bell CJ at [1]
Mitchelmore JA at [2]
Kirk JA at [49]
Decision: 1. Appeal dismissed.
2. The appellant is to pay the second respondent’s costs of the appeal.
Catchwords: ADMINISTRATIVE LAW – appeal from judicial review decision – legal unreasonableness –certificate under Costs in Criminal Cases Act 1967 (NSW) – determination of costs that should be paid by Secretary of Department – whether Secretary bound to award “costs reasonably incurred” – application of Attorney General’s payment rates for solicitors and counsel – standard of legal unreasonableness – advertence to policy considerations – statutory purpose – no error in reasoning of primary judge
Legislation Cited: Costs in Criminal Cases Act 1967 (NSW), ss 2, 3 4
Suitor’s Fund Act 1951 (NSW), s 6
Cases Cited: Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47
Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30; (2003) 198 ALR 59
Minister for Home Affairs v DUA16 (2020) 271 CLR 550; [2020] HCA 46
Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30
Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18
Patton v Mareangareu (2021) 66 VR 577; [2021] VSCA 295
Plaintiff M64/2015 v Minister for Immigration and Border Protection (2015) 258 CLR 173; [2015] HCA 50
R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177; [1965] HCA 27
Sharp v Wakefield [1891] AC 173
Category: Principal judgment
Parties: EFG (Appellant)
Secretary, Department of Communities and Justice (First respondent)
State of New South Wales (Second respondent)
Representation: Counsel:
T Molomby SC (Appellant)
P Herzfeld SC and D Birch (Second respondent)
Solicitors:
Giles George (Appellant)
Crown Solicitor for NSW (First and second respondents)
File Number(s): 2025/00124203
[This headnote is not to be read as part of the judgment]
The appellant was acquitted following a trial on indictment in the District Court for three counts of sexual intercourse without consent and one count of attempted sexual intercourse. He applied to the trial judge for a certificate under the Costs in Criminal Cases Act 1967 (NSW) (Costs Act) in relation to his costs, and a certificate was granted.
By s 4 of the Costs Act, a person to whom a certificate has been granted may apply to the first respondent (Secretary) for payment from the Consolidated Fund of the costs incurred in the proceedings to which the certificate relates. Section 4(2) provides that the Secretary may, if of the opinion that the making of a payment to an applicant is justified, determine the amount of costs that should be paid to the applicant, not exceeding the maximum amount referred to in s 4(3). Relevantly for present purposes, the maximum amount in s 4(3) is the amount that, in the Secretary’s opinion, would reasonably have been incurred by the applicant in the proceedings.
The appellant applied to the Secretary for payment of his costs pursuant to the certificate in the amount of $515,423.66. In determining the amount of costs to be paid, the Secretary assessed the maximum amount of costs as $419,976.07. The Secretary then moderated that amount using the Attorney General’s payment rates for solicitors and counsel (the AG’s rates), resulting in a final figure of $188,172.20.
The appellant sought judicial review of the Secretary’s decision, contending that the second step in the Secretary’s process rendered the decision legally unreasonable. The primary judge dismissed that application. His Honour construed s 4(2) of the Costs Act as expressly envisaging payments that were less than the maximum amount of reasonably incurred costs, with no express or implied constraint upon the Secretary adopting a scale which he or she, acting reasonably, considers appropriate. Determining an amount less than the maximum amount was not, in his Honour’s opinion, inconsistent with the statutory purpose of the Costs Act, which is directed towards providing an element of indemnification and not a complete indemnity. To the extent that the appellant contended that the Secretary had unreasonably departed from a past practice of assessing rates in accordance with principles in civil cost assessments, the evidential basis for that contention was weak and the Secretary was not, in any event, bound by past practice.
On appeal, the appellant contended that the primary judge did not adequately identify the purpose of the Costs Act (ground 1), misconstrued s 4 (ground 2), and failed to determine the legal standard of unreasonableness and find that the Secretary’s decision fell short of that standard (grounds 3 and 4).
The Court held (Mitchelmore JA, Bell CJ and Kirk JA agreeing) dismissing the appeal with costs:
(1) As to grounds 1 and 2, there was no error in the primary judge’s description of the Costs Act as concerned with partial, rather than complete, indemnity. That description is consistent with the conferral of the power to determine the amount of costs to be paid subject to a cap, and with the additional statutory purpose of appropriate expenditure and maintenance of public funds. Although the Act may be broadly described as beneficial, that does not compel a construction of its provisions otherwise unsupported by the text and context: [32]-[40]
Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47, applied.
(2) As to grounds 3 and 4, his Honour’s reasoning process did not disregard the requirement to act reasonably. Rather, his Honour’s approach was orthodox and proceeded from his construction of s 4(2) and his assessment of the standard of reasonableness in that context: [41]-[42]. There is no freestanding requirement to exercise discretionary functions in accordance with the requirements of “reason and justice”. A decision made in the exercise of a statutory power is unreasonable in a legal sense when it lacks an evident and plausible justification: [26]-[31]. None of the matters relied upon by the appellant to impugn the Secretary’s determination below or on appeal rendered it unreasonable in the relevant sense: [43]-[47].
Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18; Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30; Minister for Home Affairs v DUA16 (2020) 271 CLR 550; [2020] HCA 46, applied.
B****ELL CJ: I agree with Mitchelmore JA.
MITCHELMORE JA: This is an appeal from a decision of Basten AJ dismissing the appellant’s challenge to the validity of a decision of the first respondent (Secretary) that an amount of $188,172.20 be paid by way of costs pursuant to a certificate granted under the Costs in Criminal Cases Act 1967 (NSW) (Costs Act): EFG v Secretary, Department of Communities and Justice [2025] NSWSC 164.
In the court below, the appellant contended that the Secretary’s decision as to the amount of costs was legally unreasonable on a number of bases, each of which the primary judge rejected. On appeal, the appellant alleged that his Honour erred in the following respects:
His Honour failed to “identify adequately” the purpose of the Costs Act (ground 1).
His Honour misconstrued s 4 of the Costs Act (ground 2).
His Honour failed to determine the legal standard of reasonableness in relation to the Secretary’s reliance upon the Attorney General’s payment rates for solicitors and counsel engaged by Government departments and agencies (the AG’s rates) (ground 3).
His Honour failed to hold that the Secretary’s discretion was exercised “in a manner that fell short of the necessary legal standard of reasonableness”.
As was the case in the court below, the appeal ultimately turns on the proper construction of s 4 of the Costs Act. For the following reasons, the primary judge’s construction was correct, as was his Honour’s conclusion that the Secretary’s decision was not legally unreasonable in any of the respects that the appellant maintains on the appeal. The appeal must be dismissed.
As only the second respondent, the State of New South Wales, took an active role in the appeal (the Secretary filed a submitting appearance), references below to “the respondent” are to the second respondent.
There was no dispute about the background leading to the Secretary’s decision, and it suffices for present purposes to refer to the primary judge’s summary at [2]-[6].
In 2019, the appellant was charged with three counts of sexual intercourse without consent and one count of attempted sexual intercourse without consent. The appellant entered pleas of not guilty. In May 2022, following a trial in the District Court, the appellant was acquitted: at [2].
Following his acquittal, the appellant applied for a certificate under the Costs Act. He relied on fifteen matters to satisfy the statutory precondition, in s 3(1)(a), that if the prosecution had been in possession of the relevant evidence before instituting the proceedings, it would not have been reasonable to institute them: at [3]. On 6 July 2022, the trial judge directed that a certificate under the Costs Act be granted: at [3]. His Honour accepted that the matters on which the appellant relied, in combination, satisfied the criterion in s 3(1)(a). His Honour was also satisfied that for the purposes of s 3(1)(b), there were no acts or omissions of the appellant that contributed to the institution or continuation of the proceedings: at [3].
On 9 October 2023, the appellant’s solicitors applied for payment of costs pursuant to the certificate, seeking an amount of $515,423.66. Section 4 of the Costs Act provides:
4 Payment of costs
(1) A person to whom a certificate has been granted under this Act may apply to the Director-General for payment from the Consolidated Fund of costs incurred in the proceedings to which the certificate relates. The application is to be accompanied by a copy of the certificate.
(2) The Director-General may, if of the opinion that, in the circumstances of the case, the making of a payment to the applicant is justified, determine the amount of costs that should be paid to the applicant, not exceeding the maximum amount referred to in subsection (3).
(3) The maximum amount is the amount that, in the opinion of the Director-General, would reasonably have been incurred for costs by the applicant in the proceedings, reduced by any amounts that, in the opinion of the Director-General, the applicant—
(a) has received or is entitled to receive, or
(b) would, if the applicant had exhausted all relevant rights of action and other legal remedies available to the applicant, be entitled to receive,
independently of this Act, because of the applicant’s having incurred those costs.
(4) The Director-General may refuse an application under this section if of the opinion that, in the circumstances of the case, the making of a payment to the applicant is not justified or (without limitation) if costs are otherwise recoverable.
On 25 June 2024, the Secretary determined that the amount to be paid was $188,172.20. The Secretary notified the appellant of that decision in a letter to his solicitors dated 26 June 2024. Following receipt of correspondence from the appellant’s solicitors disputing aspects of the decision, the Secretary sent a further letter, dated 14 August 2024, which provided additional reasons for the determination. In the court below, the parties agreed that both letters constituted the reasons for the Secretary’s decision: at [6].
As the primary judge summarised at [5], in determining the amount to be paid, the Secretary adopted a two-stage process:
“The first step was an assessment of the ‘maximum amount’ incurred, being those costs which were determined to have been ‘reasonably incurred’ in the proceedings the subject of the certificate. The removal of items which were found not to satisfy that test resulted in a figure of $419,976.07. The second step involved the assessment of amounts to be allowed for those items in accordance with the Attorney General’s payment rates for solicitors and counsel, as in force at the relevant times. Those are the rates generally applied to lawyers in private practice acting for government officers and agencies.”
The appellant advanced seven particulars in support of the contention that the Secretary’s decision was unreasonable. The primary judge observed at [14] that three of the seven particulars focused solely on the Secretary’s application of the AG’s rates (particulars (c), (d) and (e)). Relatedly, particular (g) alleged that the decision was “contrary to the practice of the Department over many years from the commencement of the [Costs Act], which was to pay such costs on a party and party basis”. As his Honour said at [15], that particular implied that the change from that policy to adopting the AG’s rates was capricious or arbitrary.
His Honour further observed that two of the particulars appeared to allege errors of law, respectively contending that in making the decision the Secretary failed to comply with the purpose of the Costs Act (particular (a)) and reduced the amount to be paid to significantly less than the amount already determined to be reasonable costs (particular (b)). The remaining particular alleged, in substance, an error of fact, namely that the Secretary took the view that senior counsel appeared in the trial with a junior, when senior counsel appeared alone (particular (f)). The appellant did not pursue this particular on the appeal.
Noting the centrality of s 4(2) of the Costs Act, his Honour considered that when read with s 4(3), s 4(2) incorporates three discretionary elements (or “evaluative judgments”) (at [12]), the second and third of which I have reordered to reflect their practical operation:
The first involves the Secretary forming an opinion as to whether the making of a payment “is justified”: at [11].
The second involves determining the cap, being “the maximum amount referred to in subsection (3)”. The primary judge placed this element third but recognised that it is an antecedent exercise to the operative determination because it sets a limit on the amount which should be paid: at [12].
The third involves determining “the amount of costs that should be paid”, subject to the cap: at [12].
The Secretary determined, in the appellant’s favour, that a payment was justified (the first element), and the appellant did not take issue with the Secretary’s determination of the maximum amount (the third element). The appellant’s complaint of unreasonableness was directed to the second discretionary element. The appellant took issue with the Secretary applying the AG’s rates and the ultimate decision to award less than the maximum amount.
The primary judge concluded that in its terms, s 4(2) of the Costs Act “envisages payments which do not reach the maximum amount of reasonably incurred costs”: at [41]. His Honour later observed that the subsection empowered the Secretary to pay a lesser amount than that identified as the maximum amount by reference to s 4(3), and s 4 did not expressly constrain how that lesser amount was to be determined: at [54]. His Honour accepted that s 4 impliedly required that the amount to be paid should be determined by reference to the circumstances of the individual case: at [55]. However, his Honour did not consider it was possible to imply a requirement that the costs be subject to the kind of assessment made in civil cases, for example in accordance with the terms of legislation governing the legal profession: at [56].
“This document sets out the Department of Communities & Justice (DCJ)’s policy and procedures for assessing applications under the Costs in Criminal Cases Act 1967 (the Act).
The purpose of the Act is to compensate defendants who have been acquitted or discharged, in certain circumstances. A court may grant a certificate under the Act to a defendant who has been acquitted or discharged at any time during a trial, or if the defendant successfully appeals against a conviction.
The Assessment Process
Applications under the Act are assessed by DCJ Legal.
An assessment comprises the following steps:
1. Determination as to whether payment is justified in the circumstances of the case;
2. If payment is justified, determination as to the costs that have reasonably been incurred; and
3. Moderation of the reasonably incurred costs, in accordance with the Attorney General (AG)’s rates applicable at the time relating to the proceedings for Legal Representation and departmental guidelines (where applicable), to determine the amount for payment.”
“In determining the payment amount under section 4(2) of the Act, regard was given to the Department of Community & Justice’s policy in applying the Attorney General’s agreed rates to applications under the Act.
In accordance with this policy, the costs considered to have been reasonably incurred were moderated in accordance with the relevant Attorney General’s agreed rate … where the charge exceeded these rates.”
In light of the above matters, in so far as the appellant alleged that the AG’s rates were an irrelevant consideration (particular (c)), his Honour rejected this allegation, describing it as misconceived: at [40], [60].
As to particular (d), by which the appellant contended that in applying the AG’s rates the Secretary failed to take into account features of the proceedings that required particular expertise, his Honour considered that applying fixed rates could not of itself have given rise to that problem, as it was “precisely the approach adopted by solicitor and counsel in specifying a set of rates which they would charge”: at [61]. Addressing the substance of the complaint, his Honour stated:
“[61] … In effect, the complaint was that they were entitled to charge more. So they were; but unless the plaintiff was entitled to be indemnified for whatever his lawyers charged, that fact does not demonstrate that the Secretary’s decision was unreasonable.
[62] Nor is it correct to say that the Secretary did not consider the level of expertise required. As appears to have been the thrust of particular (f), the Secretary determined that the matter did not warrant a payment based on rates charged by senior counsel. Thus, when the Secretary did take account of the level of expertise required, that too was said to be an error. The straightforward point is that the level of expertise involved was not an irrelevant consideration, but a matter which the Secretary was permitted to take into account, and did so, as considered appropriate. Those decisions cannot be challenged as unlawful. Particular (d) must be rejected.”
His Honour also rejected the allegation that the decision was unreasonable because adopting the AG’s rates resulted in costs in a criminal proceeding being paid at a much lower rate than costs in a civil proceeding (particular (e)). Apart from the fact that the AG’s rates were also to be applied in civil matters in assessing costs for a certificate granted under s 6 of the Suitor’s Fund Act 1951 (NSW), his Honour saw nothing in the Costs Act that required the Secretary to adopt a level of hourly and daily rates which would be adopted in conducting a party and party assessment of costs in a civil proceeding: at [43]. His Honour stated that implying such a requirement “would be inconsistent with the express language envisaging a power to determine a lesser amount than the ‘reasonably incurred costs’, which, on one view, might require such an assessment”: at [43]; and see also [63]-[64].
Relatedly, the appellant’s reliance on a past practice by which costs were assessed on principles adopted in assessing party and party costs in civil matters to establish unreasonableness (particular (g)) rested on a limited evidential basis: at [50]. In any event, there were more fundamental problems:
“[50] Putting to one side the flimsy evidential basis for the content of a practice in earlier times, the submission must fail because there can be no unlawfulness in simply varying an administrative practice applying one set of rates to apply another, where both are permissible. The contention that any unexplained change in practice must be ‘arbitrary’ is fundamentally erroneous. Even adopting long-since discarded terminology, the plaintiff can have had no ‘legitimate expectation’ that his application would be assessed in accordance with a particular policy or practice, when the policy and practices as presently applied were publicly available.
[51] Nor was senior counsel for the plaintiff able to identify any case in which such a general proposition as that proposed by him had been accepted. Indeed, administrative law principles set themselves against reliance on practices or policies to fetter administrative decision-making. This was not a case where a promise had been made to the plaintiff, but not fulfilled. And even if there had been such a promise, the general rule is that no equivalent to estoppel by representation can narrow the scope of a statutory discretion.
...
[53] Even if the rates currently adopted in the Attorney General’s guideline were lower than those adopted in the past, by comparison with other measures of identifying reasonably incurred legal costs in relation to private practice (a fact not established by the evidence), that would not demonstrate that the rates applied were legally unreasonable. The fact that the rates are applied on a daily basis by the many lawyers in private practice who do State Government work precludes acceptance of such a conclusion.”
“The government bears the costs of meeting a certificate under the Costs Act because of the public interest in reimbursing a person found not guilty of criminal charges for at least part of the costs incurred in defending the charges. The government is not in the same position as an opposing party in civil proceedings. Nor is there a clear analogy with solicitor and client costs: the government is not in a contractual relationship with the plaintiff.”
The appellant accepted that s 4(2) of the Costs Act confers a discretion on the Secretary to determine the amount of costs to be paid pursuant to a certificate. However, he submitted that once the Secretary determined the “maximum costs” by reference to the costs reasonably incurred, there was no apparent reason why that amount should not be awarded in the ordinary course.
The appellant submitted in writing that the discretion in s 4(2) as to the amount of costs to be paid accommodated a situation in which the costs actually incurred were less than the reasonable costs. In oral submissions, senior counsel for the appellant submitted that the discretion was limited to exceptional circumstances that undermined paying the maximum amount to which s 4(3) refers, such as where facts come to light subsequent to the grant of the certificate that impugn the applicant’s innocence.
The appellant further submitted that reducing the amount of costs reasonably incurred by reference to the AG’s rates was unreasonable. Those rates were intended primarily for use between the State and its legal representatives and were not “a good fit” in terms of assessing costs in criminal cases under the Costs Act, and created “a massive difference” in the recovery of costs paid by the State as between civil and criminal cases. The Secretary’s routine (inflexible) reliance on the AG’s rates produced results that were contrary to the purpose of the Costs Act and was arbitrary, capricious and irrational. By contrast, the past practice by which costs were assessed on a party and party basis was “necessarily in accordance with the legal standard of reasonableness”. The reason for departing from that practice was unknown and, by implication, was also arbitrary and capricious.
In both the written and oral submissions, the appellant described the Secretary’s approach, in exercising the discretion in s 4(2) of the Costs Act and adopting the AG’s rates, as contrary to “the rules of reason and justice”. It is the case that in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18 (“Li”) at [24], French CJ referred to Kitto J’s observation, in R v Anderson; Ex parte Ipec*-Air Pty Ltd* (1965) 113 CLR 177 at 189; [1965] HCA 27, that a discretion conferred by statute has to be exercised according to the rules of reason and justice. However, the context is important. Kitto J referred to the exercise of a discretion according to the rules of reason and justice in contradistinction to a discretion that was exercised according to “private opinion”. His Honour went on to say that a discretion must be exercised “according to law, and not humour, and within those limits within which an honest man, competent to discharge the duties of his office, ought to confine himself”. The “rules of reason and justice”, the precise content of which Kitto J did not elaborate upon, do not constitute a standard that is independent of legal unreasonableness, against which the exercise of a statutory discretion is to be assessed.
It is convenient to consider grounds 1 and 2 of the notice of appeal together, given that the appellant relies on statutory purpose (the subject of ground 1) primarily as an aid to determining the scope of the discretion in s 4(2) (the subject of ground 2).
Section 4(2) of the Costs Act confers a discretion on the Secretary to “determine the amount of costs that should be paid … not exceeding the maximum amount referred to in subsection (3)”. As the primary judge stated at [13], the conferral of the power to award costs subject to a cap tells against a construction of s 4(2) as permitting the Secretary “only to make the payment that, in the opinion of the Secretary, ‘would reasonably have been incurred for costs’” (original emphasis). The appellant’s criticism, in writing, that the legislative contemplation of an award below the maximum amount says nothing of the circumstances in which those lesser payments may be made was precisely the point his Honour was making. The subsection leaves consideration of those circumstances to the Secretary in determining the amount of costs that should be paid.
The appellant accepted at the hearing that in its terms, s 4(2) of the Costs Act confers an unlimited discretion to award an amount less than the maximum amount. However, he sought to confine the operation of the discretion to exceptional circumstances that undermined the payment of the maximum amount (as outlined in [27]). As the respondent submitted, if the legislature had intended the discretion to be so limited, s 4(2) could readily have been drafted in that way.
The appellant submitted that the limitation on the discretion that he advanced was consistent with the purpose of the Costs Act, which he identified as rectifying the injustice caused to innocent persons who were wrongly accused and acquitted and had incurred legal costs in defending themselves. In writing, the appellant reiterated arguments he made below about the extrinsic materials, an exercise that the primary judge found was unproductive, not least because the current form of s 4 was quite different from the form in which it was originally enacted: at [45]-[46].
In oral submissions, senior counsel emphasised that the grant of a certificate under the Costs Act was subject to stringent requirements which were reflected in the form of the certificate (see ss 2-3). With that being the case, he submitted that it was impossible to imagine that paying less than all of the costs reasonably incurred would be justified “in a normal case” where a certificate is granted. Only partially rectifying the injustice would be “outside the range of possible acceptable outcomes which are defensible in respect of the facts and law”, and thus inconsistent with the statutory purpose.
Complete indemnification, being the statutory purpose for which the appellant contends, is inconsistent with the imposition in s 4 of a cap on the maximum amount of costs that may be recovered pursuant to a certificate. Save for the circumstances in which a person’s actual costs are less than the cap, being the costs determined to have been reasonably incurred, recovery pursuant to a certificate will be partial by reason of the cap. That is why the primary judge described the purpose of the Costs Act as providing an “element” of indemnity in the circumstances in which a certificate is provided, but not full indemnity: at [65]. The appellant’s complaint that his Honour’s description of the statutory purpose in this regard was incomplete or inadequate must be rejected.
The appellant submitted that in considering the constraints on the exercise of the discretion in s 4(2), the primary judge did not consider the requirement to act “reasonably”. Instead, he submitted, the judgment proceeded on an assumption that because the Costs Act contemplated an award less than the amount of costs reasonably incurred, the Secretary need not act reasonably in exercising the discretion to determine the amount of the award.
Those submissions misunderstood his Honour’s path of reasoning. Far from making any assumption of the nature for which the appellant contended, the primary judge’s approach to the allegation of legal unreasonableness was orthodox. His Honour:
recognised, as a matter of construction, that s 4(2) of the Costs Act accommodated the Secretary applying a scale of fees when determining the amount of costs that should be paid, for the reasons set out at [17] to [20]; and
concluded that the Secretary’s selection of the AG’s rates fell “within the range of possible, acceptable outcomes which are defensible in respect of the facts and law” (Li at [105] (Gageler J)), noting that those rates were applied on a daily basis by the many lawyers in private practice doing State government work (see [21] above).
In relation to the first aspect of this reasoning, the appellant’s complaints rested on a construction of s 4(2) that I have rejected in ground 2. In relation to the second aspect of his Honour’s reasoning, the Secretary’s application of a policy was not of itself legally unreasonable. As French CJ, Bell, Kiefel, and Gordon JJ stated in Plaintiff M64/2015 v Minister for Immigration and Border Protection (2015) 258 CLR 173; [2015] HCA 50 at [54]:
“Policy guidelines like the priorities policy promote values of consistency and rationality in decision-making, and the principle that administrative decision-makers should treat like cases alike. In particular, policies or guidelines may help to promote consistency in ‘high volume decision-making’, such as the determination of applications for Subclass 202 visas. Thus in Re Drake and Minister for Immigration and Ethnic Affairs (No 2), Brennan J, as President of the Administrative Appeals Tribunal, said that ‘[n]ot only is it lawful for the Minister to form a guiding policy; its promulgation is desirable’ because the adoption of a guiding policy serves, among other things, to assure the integrity of administrative decision-making by ‘diminishing the importance of individual predilection’ and ‘the inconsistencies which might otherwise appear in a series of decisions’.”
“As was pointed out in Minister for Immigration and Multicultural Affairs v Eshetu, to describe reasoning as illogical, or unreasonable, or irrational, may merely be an emphatic way of expressing disagreement with it. If it is suggested that there is a legal consequence, it may be necessary to be more precise as to the nature and quality of the error attributed to the decision-maker, and to identify the legal principle or statutory provision that attracts the suggested consequence.”
True it is that applying the AG’s rates resulted in the Secretary determining an amount for payment that was well below the amount of costs reasonably incurred that the Secretary relied on for the purposes of s 4(3). That difference does not render the decision unreasonable in the requisite sense. As the respondent submitted, it does not follow from a determination that $X is reasonable for a given purpose that any amount other than $X is legally unreasonable.
There was also no substance in the appellant’s reliance on what he contended was formerly the practice of determining costs under the Costs Act, in the manner of assessing party and party costs in civil cases. Apart from the “flimsy” state of the evidence as to this practice (as the primary judge described it), there could be no unreasonableness in the present case on the basis of the change in policy (assuming such a change for present purposes). The appellant was on notice of the policy that would apply in his case.
Nor was there any basis for the appellant’s contention that the decision was unreasonable because that policy was inflexibly applied. The correspondence between the Department and the appellant’s solicitors indicated that the policy was drawn to the appellant’s solicitors’ attention at the outset of the process, along with other documents, and the solicitors were invited to make submissions. The solicitors took up that opportunity in submissions dated 30 November 2023, in which they strongly objected to the policy being applied. The solicitors reiterated this objection in their letter of 8 July 2024, after receiving notification of the Secretary’s determination. The responsive letter of 14 August 2024, which formed part of the reasons, noted that in some assessments, the Secretary applied a higher rate than the AG’s rates, such that the policy is not inflexibly applied. That the present was not such a case did not render the decision unreasonable.
I propose the following orders:
Appeal dismissed.
The appellant is to pay the second respondent’s costs of the appeal.
KIRK JA: I agree with Mitchelmore JA.
**********
EFG
Secretary, Department of Communities and Justice [2025] NSWCA 245
(2007) 232 CLR 138
(2003) 198 ALR 59
(2020) 271 CLR 550
(2018) 264 CLR 541
(2013) 249 CLR 332
(2021) 66 VR 577
(2015) 258 CLR 173
(1965) 113 CLR 177
Appeal dismissed. The appellant is to pay the second respondent's costs of the appeal ([48]).
The primary judge could discern “no constraint expressed in the Costs Act which precludes the Secretary from adopting any scale which he or she, acting reasonably, considers appropriate”, including the AG’s rates: at [41]. There was a published policy that indicated that the Secretary’s approach to s 4(2) would involve applying those very rates, although his Honour considered that even if that were not the case there would be no reason why the Secretary could not apply them: at [41]. The policy document, which was in evidence before the primary judge, stated:
As the joint judgment in Li explained, a decision made in the exercise of a statutory power is unreasonable in a legal sense when it lacks an evident and plausible justification: at [76]. The legal standard of reasonableness is “the standard indicated by the true construction of the statute”: at [67]. Whether the requirements of legal reasonableness have been satisfied entails “a close focus upon the particular circumstances of exercise of the statutory power: the conclusion is drawn ‘from the facts and from the matters falling for consideration in the exercise of the statutory power’”: Minister for Home Affairs v DUA16 (2020) 271 CLR 550; [2020] HCA 46 at [26].
The requirement of reasonableness “is not a vehicle for challenging a decision on the basis that the decision-maker … has made an evaluative judgment with which a court disagrees even though that judgment is rationally open to the decision-maker”: Li at [30] (French CJ). Where, as in this case, an exercise of power by an administrative decision-maker is legitimately informed by considerations of policy, there is a practical difficulty in a court being satisfied that the test of unreasonableness is met. In Li at [105], Gageler J identified this practical difficulty as one of two important constraints on the judicial determination of unreasonableness. The second constraint his Honour identified was the stringency of the test. As Kiefel CJ observed in Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 at [11], the test of unreasonableness is necessarily stringent “because the courts will not lightly interfere with the exercise of a statutory power involving an area of discretion”.
As the respondent submitted, the primary judge’s description of the purpose of the Costs Act was consistent with at least one additional statutory objective, being the appropriate expenditure and maintenance of limited public funds. Apart from the statutory cap on the amount of costs payable, that purpose is evident in the conferral of the power in s 4 on the Secretary of the Department, a senior public official with oversight of public funds and a member of the Executive, rather than a member of the Court or a costs assessor. Gleeson CJ explained in Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47 at [5] that the general rule in favour of construing a provision so as to promote the purpose or object of an Act “may be of little assistance where a statutory provision strikes a balance between competing interests, and the problem of interpretation is that there is uncertainty as to how far the provision goes in seeking to achieve the underlying purpose or object of the Act”.
In the face of the above reasons, the appellant’s characterisation of the Costs Act as beneficial legislation does not assist. That legislation may be broadly described as beneficial does not compel a construction of its provisions that is otherwise unsupported as a matter of text and context. As the Victorian Court of Appeal observed in Patton v Mareangareu (2021) 66 VR 577; [2021] VSCA 295 at [58], in certain cases describing legislation as having a beneficial purpose may “not only distract attention from the text, but offer little guidance as to its meaning”. The present is such a case.
I would dismiss grounds 1 and 2 of the notice of appeal.