Madafferi v McKirdy

REASONS FOR JUDGMENT 1 The applicant is an unlawful non-citizen liable to immigration detention under s 196 of the Migration Act 1958 (Cth) (the Act). He is an Italian citizen but has lived in Australia since 1989. His wife, Mrs Anna Madafferi, and their four young children are Australian citizens. 2 Following litigation, the details of which are not relevant for present purposes, the applicant surrendered himself to officers of the Department of Immigration and Multicultural and Indigenous Affairs (the Department) on 18 March 2001 and was taken into detention at the Maribyrnong Detention Centre. 3 The first respondent is Manager for Victoria of the Detention Services and Travel Branch of the Department and the second defendant is State Director for Victoria of the Department. The Minister is the third respondent. 4 Following negotiations between the applicant's solicitor Mr Joseph Acquaro and the Department an agreement (the Agreement) was entered into on 14 March 2002. The Agreement enabled the applicant to be kept in detention at his home at 19 Hermitage Way, Greenvale in Victoria, that being "another place approved by the Minister in writing" within the meaning of par (b)(v) of the definition of "immigration detention" in s 5 of the Act. Under the Agreement the applicant was to be liable for costs associated with this detention arrangement. A dispute has arisen as to the proper construction of the Agreement in relation to that liability. 5 The Agreement is constituted by a document entitled "Lodgement of bond as surety for home detention arrangement" which includes Attachment A "Detention Conditions" and another document headed "Francesco Madafferi - Home Detention Costs ACM Quote". ACM is a reference to Australasian Correctional Management Ltd. 6 The first document is as follows: "LODGEMENT OF BOND AS SURETY FOR HOME DETENTION ARRANGEMENT OFFER OF A BOND FOR THE HOME DETENTION OF MR FRANCESCO MADAFFERI AT 19 HERMITAGE WAY, GREENVALE, VIC 3059. 1. Mr Francesco Madafferi, the detainee, has offered to pay a bond of $50 000 to DIMIA, payable by bank cheque made out to the Collector of Public Moneys. 2. The bond is given as a surety by the detainee to show his good faith and that he will abide by the conditions of his home detention arrangement. The conditions of the home detention arrangement are referred to in Attachment A. 3. The bond will be forfeited if the detainee escapes from immigration detention or breaches any of the conditions of his home detention arrangement. 4. The offer to lodge the surety is made on the basis that if the home detention arrangement is terminated and the detainee has complied with all conditions of the arrangement, he will be entitled to a refund of the bond less any money owing to DIMIA. I, Francesco Madafferi, offer to lodge a $50 000 bond with DIMIA as surety while I am detained at 19 Hermitage Way, Greenvale, VIC 3059. Signed: Madafferi Francesco (sgd) Dated: 14-3-02 The offer to lodge the bond is accepted and receipt for the payment of the bond is acknowledged. Signed: Stephen Russell (sgd) DIMIA State Manager Entry and Compliance Dated: 14/3/2002" 7 In cl 1 of the Detention Conditions the applicant acknowledges that he has entered into the arrangement voluntarily and that his home at 19 Hermitage Way, Greenvale will be a place of immigration detention. He also agrees to all the conditions set out in the document. Clause 2 provides that he must not leave his home unless he is escorted by an officer and that he acknowledges that to do so is to escape from lawful detention. The full cost of the escorts will be borne by the applicant. "An officer" is said to mean an employee of the Department or an employee of ACM. Clauses 3 and 4 deal with situations of emergency involving the applicant, his wife or children where he may have to leave his home and cannot wait for an escort. By cl 5 the applicant and the other residents of his home acknowledge that ACM and the Department's officers will have access at all times to his home for purposes related to his detention, transfer or removal from Australia. By cl 6 the applicant acknowledges that he is liable for all costs in respect of housing, utilities, food and medical services while he is in home detention. Clauses 7 to 13 are as follows: "7 ACM officers will visit the detainee on a random basis, four times each day. The full cost of the visits will be borne by the detainee. 8 Two ACM officers will also escort the detainee from the alternative place of detention as required for external appointments. These appointments must be approved in advance by the DIMIA State Manager, Entry and Compliance. The fees charged by ACM for escorting the detainee will accrue from the time ACM officers depart the Maribyrnong Immigration Detention Centre until they return to the centre at the conclusion of their escort duties. The costs will be charged at an hourly rate of $38.22 per ACM officer and costs will also include car hire and operating costs. The full cost of the escorts will be borne by the detainee. 9 The detainee will pay a deposit on the daily maintenance costs of the home detention arrangement, initially amounting to $16 800 for 28 days. This deposit is based on an ACM estimate of costs for services included as Attachment A. This deposit will be payable in advance for each 28 day period. Following the first 28 day period of the home detention arrangement, a review of the maintenance costs will be held and the cost may be altered accordingly. 10 The first deposit of $16 800 must be made to DIMIA prior to the detainee's transfer to 19 Hermitage Way, Greenvale, Victoria 3059. 11 Further deposits of $16 800 will be payable three (3) business days prior to the commencement of each four week period. Actual costs will be determined according to the number of approved external appointments for the detainee and the length of time taken for ACM visits to the alternative place of detention. 12 Where the costs for a four week period exceed $16 800 the detainee must pay the difference within 7 days following notification from DIMIA. Where the costs for a four week period are less than $16 800, the difference will be deducted from the next month's costs when they become payable. 13 If the additional costs amount is not paid within seven days following notification by DIMIA, the home detention arrangement at 19 Hermitage Way, Greenvale, Victoria 3059 will be terminated." 8 By cl 14 Mrs Madafferi is designated as a non-officer to hold the applicant at his home. Clause 15 provides that this arrangement may be terminated at any time at the sole discretion of the Department's State Manager, Entry and Compliance. If the arrangement is terminated the applicant will return to Immigration Detention at the Maribyrnong IDC. 9 The "ACM Quote" is as follows: "FRANCECO MADAFFERI - HOME DETENTION COSTS ACM QUOTE Unannounced visits to Mr Madafferi's residence: Staffing required One officer @ $38.22 x 3.5 hours x 4 visits ($535.08 per day) $14,982.24 Care [sic] hire $65.00 per day) 1,820.00 Plus fuel Total (28 days) $16,802.24 Escorted appointments Two officers @ $38.22 per officer per hour of the escort (calculated from the time of the officers' departure from the Maribyrnong IDC until their return to the centre); For example: 6 hour escort = $458.64" 10 On 14 March 2002 the applicant paid to the Department the bond amount of $50,000 and the further sum of $16,800 referred to in cll 9 and 10. On or about the same day the applicant was removed from the Detention Centre to his home, where he has remained ever since. 11 On 26 April 2002 the Department sent a fax to the applicant's solicitor enclosing a printout of what were said to be "the actual costs for the first 28-day period of home detention, amounting to $16,063.78". By a fax dated 30 April 2002 the applicant's solicitor replied. He stated that the present arrangement with ACM was that a security guard travelled from Maribyrnong Detention Centre to the home at Greenvale randomly at least four times a day. The guard while remaining in the car telephones the applicant in advance asking him to make himself visible from the roadway and in front of the premises. After satisfying himself that the applicant is at home the guard drives off. The solicitor asserted that the process of scrutiny takes no more than five minutes and is done while the guard remains in his or her car. The travelling to and from the Detention Centre to the home and return takes no more than forty-five minutes to an hour, depending on the local traffic. The solicitor pointed out that ACM had claimed in its costing three hours for each random visit but the suggestion that this was a minimum allowance was not referred to in the original quote. The solicitor further noted that ACM had not made allowances for the fact that visits on the applicant had coincided with guards commencing and concluding their work shifts at the Detention Centre and being on route to or from their homes. It was said that no allowances had been made for the fact that there had been two or more random visits effective within the hour by the same guard and that there had been five random visits in one day. The solicitor requested that the Department look into the cost detail provided by ACM and assess those costs retrospectively in determining the actual amount incurred exclusively for the applicant. 12 On a date which does not emerge precisely from the evidence the applicant made a second payment of $16,800 to the Department. 13 On 6 May 2002 the applicant's solicitor wrote to the Department stating that he had had no reply to his letter of 30 April. The letter said: "As we have not heard from you in relation to the dispute that has arisen in respect of the supervision costs' the best estimate of the actual cost of supervising our client at home by ACM is as follows: March/April commencing 14 March 2002 1 day, 2 guards ($38.22 per hour) $76.44 27 days, 1 guard ($38.22 per hour) 4,127.76 Hire of car at $17 per visit 476.00 Petrol 330.00 $5,001.20 April/May commencing 11 April 2002 28 days, 1 guard $38.22 per hour) $4,280.65 Hire of car at $17 per visit 476.00 Petrol 330.00 $5,086.65 Total Estimated Actual cost to 9 May 2002 $10,096.85 Total payments made to 9 May 2002 ($33,600.00) Credit in favour of client $23,503.15 CR Unless the dispute is finalised we believe there to be sufficient moneys held by your Department and received previously from my client's family to cover the actual cost of supervision for the next period commencing 10 May 2002. You will note below that after taking into account the next scheduled payment the sum of $18,416.50 remains to the credit of my client's account. Balance of moneys after payment of March & April 2002 c/f $23,503.15 CR Estimate of Actual cost May/June (5,086.65) Balance of moneys held by DIMIA 18,416.50 Cr We would also remind you that the Department, as part of the home detention arrangement it holds a further sum of $50,000 by way of bond. We believe that the Department is more than adequate security to cover its out of pocket expenses if it were determined that the actual costs of supervision is greater than that estimated herein." [Sic] 14 The letter was marked for the attention of Mr Greg Kelly and Ms Christine Syke and was copied to Mr Bernie Kay, Senior Advisor to the Minister in Canberra, and to Mr Steven Russell of the Department in Melbourne. 15 The applicant's solicitor on the following day 7 May 2002 sent a further letter marked "urgent" to the Department enclosing a joint report from the Department-appointed clinical psychologist Mr Guy Coffee and psychiatrist Dr John Weinkove. The letter stated: "In this regard we ask that you take note of the report in allowing Mr Madafferi to continue to remain in home detention notwithstanding that a dispute has arisen as to the issue of actual costs incurred by the Department and to be paid by our client." The letter quoted comments from the joint report: "We also wish to reiterate our previous opinion that Mr Madafferi does not have the psychological resilience to undergo another period of detention." The letter continued: "We ask that you consider the contents of our letter to you dated 6 May 2002 and the comments made in the enclosed report in allowing home detention to continue with such variations to the present conditions that will allow Mr Madafferi to seek medical attention without the financial prohibiting nature of the escort and day to day supervision cost of such conditions." A copy of the letter of 6 May was enclosed. The letter of 7 May was sent and copied to the same officers as that of the 6th, and also to Ms Di Miller. 16 The joint report also stated: "It is of considerable concern to us that Mr Madafferi is not receiving the psychiatric assistance he requires. This is partially due to his indifference about his own health, but also because of the prohibitive costs involved in having him transported by security officers to a clinic. It should also be noted that he finds such an escort stigmatising." The report noted that the applicant still suffered from "major depression" experiencing insomnia, appetite loss, lowered energy levels and impaired memory. 17 There was no reply from the Department until some nine months later on 6 February 2003 when the second respondent wrote indicating that the Department was prepared to accept a variation to the Agreement so that varying visits to twice per day with one extra random visit per week. The letter asserted that the applicant had not complied with all conditions of the current Agreement namely the payment of accounts. As at 29 December 2002 he had an outstanding debt of $118,618.25 which was increasing at a rate of approximately $16,000 per month. It was stated that the applicant had thirty days to settle his outstanding debt. If the breach was not resolved his home detention arrangements would be terminated. The letter stated the actual call-out cost of visits was a minimum of three hours. 18 On 6 March 2003 the applicant commenced this proceeding seeking injunctions (i) to restrain the respondents from demanding that the applicant pay the sum of $118,618.25 by 7 March 2003 and (ii) from treating the applicant as in breach of the Agreement on failure to pay the sum of $118,618.25 on or before 7 March 2003 and also declarations (iii) that the demand in the letter of 6 February 2003 was in breach of the terms of the Agreement on its proper construction and (iv) that the demand on 6 February 2003 for payment of $118,618.25 by 7 May (sic, presumably March) 2003 was unconscionable. On 7 March I granted interlocutory relief essentially in terms of (i) and (ii). 19 I now turn to the construction issue. Argument proceeded on the implicit assumption that the Agreement was a document whereby the parties intended to create legal relations and that its meaning and effect were to be determined in accordance with ordinary contractual principles. 20 The Agreement provides for the payment of costs by the applicant in relation to random daily inspections and escorts from the home for external appointments. It is only the former that is in issue. Senior counsel for the respondents relied on cl 7 of the Agreement. She said that "full cost of the visits" must mean the costs charged by ACM to the Department. However I do not think that construction is correct in the light of the Agreement as a whole and particularly cll 8, 9, 10, 11 and 12. Although the term "deposit" is used, in substance what is provided for is a provisional payment on account month by month as long as the Agreement operates. It is to be inferred that part of the circumstances in which the Agreement was made was a realisation that it was not possible to predict exactly what costs would be incurred by the random visits. It would have been open to the Department to stipulate for a flat fee of $16,800 per month, or alternatively for reimbursement by the applicant of the amounts actually charged from month to month to the Department by ACM. But cl 11 takes a different approach. It specifically refers to "the length of time taken for ACM visits to the alternative place of detention". This is consistent with the approach of cl 8 in relation to escorts. The fees charged by ACM are to accrue "from the time ACM officers depart the Maribyrnong Immigration Detention Centre until they return to the centre at the conclusion of their escort duties". 21 The ACM quote is no more than, as the Agreement says, an estimate. It may have been prepared by someone unfamiliar with the geography of the Melbourne Metropolitan area. Be that as it may, once its function is understood it cannot be relied on, as the respondents' argument asserted, as somehow governing what the actual time of visits is to be. Either the quote is an amount certain or it is an estimate. If the latter, there is no basis for saying that the actual time has to be "somewhere near" the time mentioned in the quote. 22 The applicant's construction is not only preferable as a matter of language. It gives the Agreement an operation that is fair and reasonable. Since the Department is operating under a statutory warrant and exercising powers greatly impinging on personal liberties, it is not lightly to be imputed to the parties that they intended a basis for charging that would give profit for 3.5 hours work when only one hour was done, a result which might be characterised as capricious, unreasonable, inconvenient or unjust: see Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99 at 109. 23 Senior counsel for the respondents referred to a recent decision VLAH v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 1554 where Ryan J, speaking of the definition of "immigration detention" said (at [10]): "… the flexibility in the selection of a mode and place of detention which the various statutory definitions afford does not, by implication, restrict the Minister's choice in a particular case, or impose any statutory duty to consider alternative modes of detention." However that case was not concerned with any contractual arrangement like the Agreement in the present case. The applicant was, by the terms of his bridging visa, to present himself for removal from Australia on 10 December 2002. On that day he sought an interlocutory injunction to restrain the Minister from detaining him in an immigration detention centre because of the likely adverse effect on his physical and mental health. Ryan J held (at [9]) that the selection by the Minister of a particular mode of detention was invalid only if it went outside the definition of "immigration detention" in s 5 or if it was made for some ulterior purpose such as the punishment of the non-citizen. 24 As already mentioned, there were negotiations leading up to the making of the Agreement, but in my opinion the Agreement is not ambiguous and can be construed without resort to the negotiations, even for the limited purpose referred to in Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352. 25 Senior counsel for the respondents argued that no declaration should be made and no injunctions granted because the applicant was in breach of the Agreement even on his own construction and in any event the Agreement by cl 15 provides for the termination of the agreement at the sole discretion of the State Manager, Entry and Compliance. I take it that these arguments were advanced as matters going to the exercise of discretion against the grant of the relief sought. 26 Now it is true as a matter of arithmetic that if one accepts the applicant's calculations of liability of approximately $5,000 per month his credit would have been used up by the end of August 2002. Moreover, I agree with the respondents that the $50,000 bond cannot be appropriated to meet the monthly payments. It is, as its terms suggest, a security for abiding by the conditions of home detention. 27 However, until the letter of 6 February 2003 the Department gave no indication that it was treating any non-payment by the applicant as a repudiation of the agreement. On the contrary, it continued to allow the applicant to remain in detention at his home and authorised the random visits day by day. Also the Department took nine months to respond to a reasonable request of the applicant's solicitor, asserting a construction of the agreement which in substance I have found to be correct, and advancing a case on compassionate grounds for reconsideration in any event. 28 As to the cl 15 power of termination, it seems at least arguable that there is an implied term that reasonable notice be given, as seems to be implicitly accepted by the Department in the letter of 6 February 2003. Perhaps more importantly, I think that for the purpose of exercise of discretion I should assume that the Department will act fairly and reasonably. It would not be fair or reasonable to exercise that power until the true obligations of the applicant on the construction of the Agreement now decided have been worked out and he has been given adequate opportunity to meet them. 29 So as a matter of discretion I think I should grant the injunctions and declarations sought. Counsel for the applicant suggested that an appropriate course would be to stand the matter over while the parties seek to reach agreement as to the amount actually owing. Although the application seeks only the injunctions and declarations mentioned, the question of what is actually due under the Agreement would be a matter arising under a law made by the Parliament within the meaning of s 39B(1A)(c) of the Judiciary Act 1903 (Cth) and would in any event fall within the accrued jurisdiction of the Court. There will be an order that the respondents pay the applicant's costs. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.