GKX18 v Minister for Immigration and Multicultural Affairs

The grounds for ordering indemnity costs must be connected with the actual litigation, rather than circumstances leading up to the litigation. Even unconscionable conduct, breaches of fiduciary duty, fraud and other deplorable conduct when established in litigation will ordinarily lead to an order for costs on the usual basis and something more must be established for a special order as to costs: Harrison v Schipp; Cameron v Schipp [2001] NSWCA 13 at [136] per Giles JA (with whom Handley and Fitzgerald JJA agreed); NMFM Property Pty Limited v Citibank (No 11) [2001] FCA 480; (2001) 109 FCR 77 at 92 [56] per Lindgren J; Hypec Electronics Pty Limited (in liquidation) v Mead; BL & GY International v Hypec Electronics Pty Ltd (in liq) at [43]-[46] per Campbell J.

1. In reply, the applicant noted that, at paragraph 12 of Ventouris, Slattery J said:

The principles that apply to an award of indemnity costs, other than in respect of [a] Calderbank letter are clear. The discretion to order indemnity costs must be exercised on grounds connected with the actual litigation and that conduct in the circumstances leading up to the litigation as opposed to conduct in the litigation itself is not a relevant type of connection unless it bears upon the conduct as a litigant: Hypec Electronics Pty Limited (in liquidation) v Mead; BL & GY International v Hypec Electronics Pty Ltd (in liq) [2004] NSWSC 731; (2004) 61 NSWLR 169 at 179 [42], 180 [45]-[47] per Campbell J... (emphasis added)

1. The applicant argued that, in the present case, the respondents' conduct bore upon their conduct as litigants.
2. In Hypec Electronics Pty Limited (in liquidation) v Mead; BL & GY International v Hypec Electronics Pty Ltd (in liq) (2004) 61 NSWLR 169; (2004) 185 FLR 76; (2004) 50 ACSR 448; [2004] NSWSC 731 at 180 [46], Campbell J discussed what would be the relevant sort of connection between the prior conduct and the litigation, saying:

... A connection with litigation, which takes the form of being the facts which are themselves the subject matter of the litigation, is not a relevant type of connection for the purposes of making an indemnity costs order. Nor is it a relevant sort of connection that the person has, in the circumstances which are the subject of the litigation, breached duties which they owe to one of the litigants, where that breach of duty is not itself the subject of the litigation. Nor is the fact that someone has engaged in tax fraud in the circumstances which have led up to the litigation. (emphasis added)

1. In the present case, the respondents had a duty not to detain the applicant unlawfully. The breach of that duty was the subject matter of the present proceedings, which was primarily an application for the respondents to stop detaining the applicant. It follows that the prior conduct of the respondents is relevantly connected with the litigation.
2. However, the respondents also submitted that:

In any event, there was nothing unreasonable about the Minister's conduct pre-litigation. The applicant did not have a visa and he was required to be detained under s 189 of the Migration Act 1958 (Cth) (Act). He had earlier applied for a protection visa, but he was unsuccessful. It would have involved a failure of the Minister's duty to detain the applicant if the applicant had been released purely on the basis of some (seriously questionable) findings made by a Tribunal in 2022. (footnotes omitted)

1. It was within the Minister's power to give the applicant a visa, which he did on 16 October 2024, without any explanation. It is unclear why the Minister did not grant the applicant a visa earlier. If the Minister had granted the applicant a visa earlier, he would not have needed to be detained under s.189 of the Act from the date of the grant of the visa.
2. The respondents' claim that the Tribunal's non-refoulement findings in 2022 were "seriously questionable" is surprising. Are the respondents asking the court to look at the merits of that finding? That would be inconsistent with the Minister's granting the applicant a Bridging Visa E on 16 October 2024. The reasons for granting that visa were not explained to the court or the applicant. However, the conclusion seems unavoidable that the Minister granted the applicant the Bridging Visa E because the Tribunal's non-refoulement findings were valid and sound.
3. In the absence of any explanation about why the Minister granted the applicant a Bridging Visa E on 16 October 2024, but did not grant such a visa earlier, it is difficult to avoid the conclusion that the delay in granting the applicant a visa, and releasing him from detention, was unreasonable.

1. The applicant argued that the respondents were well aware their defence of the application for habeas corpus was doomed to fail, because they were well aware of the Tribunal's non-refoulement finding and were well aware of Australia's non-refoulement policy.
2. The respondents argued that there has not been any final order in respect of the applications for habeas corpus or an injunction, so it is not yet possible for the court to decide that the respondents' case was doomed to fail.
3. The applicant said in reply that the question was whether the respondents should have realised that their defence was so speculative or weak that it was very likely to fail and should not be pursued any further: Lejonvarn v Burgess [2020] EWCA Civ 114; [2020] 4 W.L.R. 43; [2020] 4 All E.R. 461; [2020] 2 WLUK 39; [2020] B.L.R. 187; [2020] Costs L.R. 45; [2020] C.L.Y. 175 at [56].
4. The applicant did not expressly state precisely when the respondents should have realised that their defence was so speculative or weak that it was very likely to fail. However, it seems implicit in their submissions that the respondents should have realised, prior to the applicant's filing of the application on 11 September 2024, that their defence was so speculative or weak that it was very likely to fail.
5. Although the applications for habeas corpus and an injunction have not been finalised, the respondents largely capitulated on the habeas corpus application when the Minister granted the applicant a bridging visa and released him from detention.
6. The injunction application remains a live issue. However, it was given very little attention by the parties in the proceedings up to and including 20 January 2025. Consequently, the fact that the injunction issue remains outstanding has negligible bearing on the costs issue.
7. In view of:

(a) the respondents' capitulation in granting the applicant a bridging visa;

(b) the High Court's decision in NZYQ;

(c) the Tribunal's non-refoulement finding; and

(d) the respondents' failure to give any explanation for granting the applicant a bridging visa on 16 October 2024 and not before,

I conclude, on the material presently before me, that the respondents' case in relation to habeas corpus was always weak and speculative and should not have been pursued.

Reason 3: unreasonable conduct re non-refoulement policy

1. The applicant argued that the respondents behaved unreasonably by not "responding" to the issue of the government's non-refoulement policy. The applicant raised this issue in his letter dated 7 October 2024 and at various subsequent times. However, it is unclear what "response" the applicant expected.
2. The only specific action by the applicant that called for a response by the respondents was his call for production of the non-refoulement policy at 11.06am on 11 October 2024. After some prevarication, the respondents provided a statement of the non-refoulement policy to the applicant at 2.07pm on the same day. That is not an excessive delay in all the circumstances, and did not significantly add to the costs or complexity of the matter.
3. However, the applicant perhaps did not mean that the respondents did not "respond" to the issue of the non-refoulement policy. Rather, he seems to have meant that the respondents did not give that policy due weight. The argument seems to be that, if the respondents had given due weight to their own non-refoulement policy, they could not possibly have defended the habeas corpus application.
4. What actually happened is that, notwithstanding the Tribunal's non-refoulement finding, the Department of Home Affairs, on 1 October 2024, did a pre-removal clearance assessment which found that the applicant was not owed non-refoulement obligations. The respondents' case seems to have been that, somehow, the pre-removal clearance assessment overrode the Tribunal's non-refoulement finding.
5. However, during the hearing on 11 October 2024, the respondents' witnesses admitted that Australia has a non-refoulement policy, it would be an impediment to the removal of the applicant and the pre-removal clearance assessment was "not sufficient" or "thorough".
6. The respondents in the costs application submitted that they ran their substantive case on the basis that the applicant was not owed non-refoulement obligations, so the non-refoulement policy was irrelevant. And yet, the Minister, without an explanation, gave the applicant a bridging visa on 16 October 2024. In the absence of an explanation by the Minister, the only reasonable basis on which it appears that the Minister could have given the applicant a bridging visa was that he was owed non-refoulement obligations.
7. All in all, on the material presently before me, I consider that it was unreasonable for the respondents to consider that a pre-removal clearance assessment, and especially one that was "not sufficient" and not "thorough", could override the Tribunal's non-refoulement finding. This unreasonable stance infected the respondents' entire case.

Reason 4: unreasonable conduct after 16 October 2024

1. The applicant noted that, on 11 October 2024, he called for the production of a number of documents.
2. Firstly, the applicant called for the production of the government's non-refoulement policy. As discussed above, this was produced on 11 October 2024. There was no delay in production following the call that could lead to the awarding of indemnity costs.
3. Secondly, the applicant called for the production of case-management notes. These were not produced until 3 February 2025, after the applicant asked for them again on 2 February 2025. That is a delay of almost four months, or three months if the Christmas period is excluded.
4. The respondents argued that the habeas corpus proceeding had been rendered moot, or was at least in abeyance, so the call did not have to be answered. That is not correct. The call had to be answered, unless and until it was withdrawn or the court said it did not have to be answered. The respondents seem to have admitted as much by eventually producing the required documents.
5. However, the applicant has not explained the significance of the case management notes, or how the delay in their production might lead to an award of indemnity costs.
6. Nevertheless, the applicant argued that he should get indemnity costs because the respondents failed to comply with a direction of the court on 11 October 2024 that they produce the documents. I have read the transcript of 11 October 2024 and cannot see a direction as such for production, and there was certainly nothing along those lines in the orders made on that day. However, I did say something to the effect that a call for production had to be answered by producing the documents called for, if any. In any event, I do not think this "direction" strengthens the applicant's position.
7. Thirdly, the applicant called for the production of an email dated 23 September 2023. The respondents claimed legal professional privilege for the email on 15 October 2024 but then withdrew that claim on 30 January 2025. I gather that the respondents then provided the email to the applicant. However, again, the applicant has not explained how this email, or the delay in its production, or the erroneous claim for privilege, might lead to the award of indemnity costs.
8. Fourthly, the applicant called for the production of an email dated 18 September 2024. The respondents claimed public interest immunity for it on 15 October 2024. The applicant withdrew the call for production. These circumstances do not support an award of indemnity costs.
9. The applicant also noted that, on 12 December 2024, he wrote to the respondents seeking an update on what his immigration status would be after his bridging visa expired on 17 February 2025. The applicant also said that the respondents did not provide an update until after the court made orders on 20 January 2025. That is not quite correct. The respondents, by letter dated 10 January 2025, informed the applicant that, when his existing visa expired on 17 February 2025, he should submit to being administratively detained to permit the Minister to intervene under s.195A of the Act to give the applicant a further bridging visa, which he undertook to do. As promised, the Minister did give the applicant a further bridging visa, albeit one with numerous conditions. The applicant argued those conditions had the effect of him still being detained for habeas corpus purposes. As mentioned above, that point will be considered in separate reasons for judgment in connection with the respondents' application for summary dismissal of the habeas corpus application.
10. In any event, the reason that the matter was adjourned from 16 October 2024 until 20 January 2025 was to allow the parties to gather their thoughts and work out their next steps. In all the circumstances of this case, it was not unreasonable for the respondents to use most of the available time, until 10 January 2025, to work out their position. It was not unreasonable for the respondents to take the time that they did. Having said that, it was obviously very uncomfortable for the applicant to not know what would happen to him after 17 February 2025, and, specifically, whether he would be returned to detention.
11. The applicant also argued that the respondents had still not determined the applicant's immigration status. He has been given another bridging visa, which is of indefinite duration. However, his immigration status remains unclear. This would obviously be a very uncomfortable position for the applicant to be in. However, he has not explained how it might lead to an award of indemnity costs.

1. The applicant, in a second reason 4, said that he had been successful on the habeas corpus application to date, in that the respondents had capitulated on the lawfulness of his detention on 16 October 2024. That is no doubt why the respondents have conceded that they should pay the applicant's costs on the usual basis up to 20 January 2025. However, the applicant has not explained why this circumstance would support an award of indemnity costs. Obviously, losing a case is not, in itself, a sufficient justification for indemnity costs.

1. The applicant argued that the respondents, contrary to s.190 of the Federal Circuit and Family Court of Australia Act 2021, had failed to comply with the overarching purpose of the rules of court, which is to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible.
2. The applicant at first said that the respondents should have settled prior to the commencement of the proceeding on 11 September 2024. However, in reply, the only document the applicant relied upon was his letter dated Sunday 13 October 2024 to the respondents. That letter was sent after the first day of the hearing on 11 October 2024 and before the second day of the hearing on 16 October 2024. The letter said:

1. The Applicant invites the Respondents to concede subject to the following conditions:

(a) The Applicant is granted a protection visa using the First Respondent's ministerial intervention powers under s417 of the Migration Act 1958; and

(b) The Respondents pay the Applicant's costs of the proceedings to date.

1. This offer is open until noon Monday 14 October 2024.
2. This letter may be tendered regarding costs, including on an indemnity basis, if the offer is not accepted.

1. When the applicant sent this letter, he had well and truly expressed his position in open court that the non-refoulement finding made by the Tribunal meant that he could not be returned to Iraq in keeping with the non-refoulement policy of the Australian government.
2. However, the letter does not meet the requirements of a Calderbank offer, which is sometimes regarded as sufficient for an award of indemnity costs. For one thing, the letter proposed that the applicant be given a protection visa, which he has not been given. To that extent, the applicant has not bettered the offer. The Calderbank principles do not apply.
3. However, on the material presently before me, the respondents' conduct involved non-Calderbank unreasonableness. As noted above, the Minister, without explanation, gave the applicant a Bridging Visa E on 16 October 2024. The facts known on 16 October 2024 were the same as the facts known prior to the commencement of the litigation, namely, that the High Court had handed down its judgment in NZYQ and the Tribunal had made non-refoulement findings in respect of the applicant.
4. The one additional fact, that only became apparent during the cross-examination of the respondents' witnesses on 11 October 2024, was that the pre-removal clearance assessment, conducted by the second respondent's own department, was not sound. Prior to 11 October 2024, the respondents appear to have been of the view that the departmental assessment could displace the Tribunal's non-refoulement findings. The respondents have not sought to justify that view. At this stage of the proceedings, I can only conclude that the respondents' view was wrong, and was always wrong.
5. In all the circumstances, and on the material presently before me, it was unreasonable for the respondents to not release the applicant from detention following the High Court's decision in NZYQ on 28 November 2023 and the applicant's request for his release from detention by letter dated 7 August 2024. That letter was about one month prior to the commencement of the habeas corpus proceedings.
6. It was also unreasonable for the respondents to place condition 8510 on the applicant's Bridging Visa E, which the respondents in effect have conceded.

1. The applicant also argued that the respondents had not complied with their obligations as model litigants. The respondents argued that the model litigant obligations have no bearing on whether indemnity costs ought to be awarded. I accept that submission.

1. The circumstances of this case might not fall neatly into any of the categories identified in Colgate-Palmolive. However, as clearly stated in that case, the categories for indemnity costs are not closed.
2. Essentially, on the material presently before me, the respondents ought to have released the applicant from detention following the High Court's decision in NZYQ and the applicant's letter dated 7 August 2024. That is, he should have been released from detention prior to the commencement of the proceedings because of the reasoning in NZYQ and because of the non-refoulement findings made by the Tribunal. On the material presently before me, it was grossly unreasonable for the respondents to oppose the application for habeas corpus based on nothing more than the departmental pre-removal clearance assessment, especially as their own witnesses admitted that assessment was "not sufficient" and not "thorough". The respondents appear to have conceded as much, in effect.
3. It appears to me, on the material presently before me, that the respondents ran their case "in wilful disregard of known facts or clearly established law" or made "allegations which ought never to have been made" or unduly prolonged the case by "groundless contentions": Colgate-Palmolive. It follows that the respondents ought to pay the applicant's costs up to and including 20 January 2025, reasonably incurred, on an indemnity basis.
4. The applicant asked the court to fix a lump sum immediately. The respondents submitted that the costs should be assessed if not agreed. I consider that the latter course is preferable, to allow proper scrutiny of the claim, particularly in relation to whether all of the costs were reasonably incurred. I will order that the indemnity costs up to and including 20 January 2025 be assessed by me if not agreed.
5. In relation to the costs of the costs application, the applicant seeks that the costs of the costs submissions be on an indemnity basis and, failing that, be costs in the cause. The respondents argue that the applicant should pay their costs of the costs submissions on an ordinary basis.
6. As the applicant has been successful on the costs issue, the respondents should pay his costs of the costs submissions. As the respondents have not behaved in any particularly egregious manner in relation to the costs submissions, I consider that this aspect of the matter should be on the "ordinary basis", rather than indemnity costs. However, our scale does not lend itself to an assessment of costs for submissions. I will order that these costs be assessed by me if not agreed.
7. Finally, the respondents argued that they ought to be allowed to set-off the costs owed to the Minister by the applicant in other migration proceedings. Those costs amount to about $18,000. The costs orders were made in 2019, 2020 and 2022. The applicant acknowledged that the court has a discretion to allow a set-off when it is equitable to do so.
8. There is an issue in the authorities about whether an identity of parties is necessary for there to be a set-off. However, the respondents in the present case are essentially the Commonwealth, so I do not consider this to be a problem. There is also an issue in the authorities about whether a set-off can be ordered where there are different proceedings with a different factual matrix. However, the court has a general discretion in relation to costs which is not restricted by such matters.
9. The main reason that the applicant gave for opposing the set-off was that his lawyers were working on a conditional costs basis, and eating into any costs order with a set-off would discourage lawyers from acting on such a basis for other people in the future. The applicant submitted that was contrary to the public interest.
10. I accept the applicant's submission on this last point. That is, I accept that there is a public interest in people challenging governmental decisions being adequately legally represented, and allowing a set-off in circumstances such as the present may discourage appropriate lawyers from acting. This factor weighs particularly heavily in the present case, where, on the material presently before me, the respondents have behaved unreasonably. Consequently, I will order that the costs ordered in the present proceeding not be set-off against the costs in previous proceedings.

I certify that the preceding eighty-eight (88) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Riley.