Minister for Immigration and Multicultural and Indigenous Affairs v Zhou

THE COURT: 1 The appellant, the Minister, seeks an order that the respondent, M/s Zhou, pay the appellant's costs of the appeal. The appeal of the Minister was allowed in orders made on 16 June 2006 following the delivery of reasons on that date. 2 In support of his application for costs the Minister maintains that the order is sought on the basis of the usual position that costs follow the event (that is, a successful party should be awarded costs): see Oshlack v Richmond River Council (1998) 193 CLR 72 at [35] per Gaudron and Gummow JJ, [66]-[67] per McHugh J (with whom Brennan CJ agreed), [134] per Kirby J. 3 The Minister also states that the Court has a discretion as to the award of costs, although that discretion must be exercised judicially in accordance with established principles and factors connected with the litigation: Federal Court of Australia Act 1976 (Cth), s 43; Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at 234 per Black CJ and French J. He relies on the statement by Merkel J in De Silva v Minister for Immigration and Multicultural Affairs (unreported, Federal Court of Australia, 31 March 1998) to the following effect: 'It is well established that the Court has an absolute and unfettered discretion to make orders as to costs but the discretion must be exercised judicially. In some case the Court may be justified in departing from the usual orders in relation to costs when the justice of the case so requires because of a "special or unusual" feature: see Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 141 ALR 727 at 733; or because of "exceptional or special" circumstances: Oshlack v Richmond River Council [1998] HCA 11 at paras 135 and 143 per Kirby J.' The Minister submits that the present appeal does not involve any 'special or unusual' features or 'exceptional or special' circumstances to justify a departure from the usual order as to costs. 4 The Minister notes that M/s Zhou may apply (as she has done) for a costs certificate under s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) and no submissions are made by the Minister opposing or otherwise addressing that possibility. 5 M/s Zhou contends that the proceeding has involved 'special or unusual' features, if not 'exceptional or special' circumstances, so that a departure from the usual order as to costs is justified. She maintains this is because the judgment at first instance (essentially overturned by the determination of the appeal) affected a significant number of cases arising from the frequency of applications to the courts challenging the cancellation of student visas for non-compliance with condition 8202. It is maintained that a significant number of applications were being adjourned by the courts to await the outcome of the appeal. No evidence of these facts has been adduced but the assertion as such is not challenged. 6 M/s Zhou further submits that this appeal had something of the character of a test case on a general question of law. This is contended because M/s Zhou sought to defend the judgment below on what was considered by her to be an arguable basis but nevertheless involving a concession that the precise grounds on which the Court below founded its judgment were not sustainable. In support of this it is said that in Minister for Immigration and Multicultural and Indigenous Affairs v SZAYW (2005) 223 ALR 1 which involved a dispute as to who should have the costs of the matter before the Federal Magistrates Court, no order for costs was made on the appeal due to the failure of the Minister to challenge an earlier judgment identical to the one the respondent successfully challenged. The Full Court said in this context before stating that there was no order for costs below: '… There is a public interest in settling quickly at an intermediate appellate level novel points on which litigants aggrieved by visa decisions under the Act, have succeeded if the Minister takes issue with the point on which the success is founded.' Here it is contended by M/s Zhou that there was consequently a public interest element in the case involving the reasoning in Morsed v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 193 and to the interaction of the relevant provisions of the Migration Act 1958 (Cth) with s 20 of the Education Services for Overseas Students Act 2000. 7 Further, M/s Zhou contends, it is relevant that the Minister retains the benefit of the order of this Court dismissing the application with costs in the Federal Magistrates Court. 8 There are clear differences (accepted by M/s Zhou) between the issue in SZAYW and the appeal in this proceeding. Further, as the reasons on this appeal state, the relevant reasoning of the Full Court in Morsed was obiter and, additionally, this proceeding is not one where, like Morsed, there were alleged defects in the s 20 notice. What was at issue was the reasoning of the Federal Magistrate at first instance. It was conceded by M/s Zhou that the factual connection upon which the Magistrate relied was not a proper basis for providing a foundation for her case. She therefore advanced another argument, that relating to 'legal interaction', which was found on the appeal not to sustain the Federal Magistrate's decision. 9 In these circumstances, we are unable to accept that there were 'special or unusual' features or 'exceptional or special' circumstances such as would require the exercise of the discretion in a way contrary to the usual rule that costs should follow the event. We are therefore of the opinion that an order should be made that M/s Zhou pay the appellant's costs of the appeal. M/s Zhou chose to pursue the appeal which involved reliance on a ground other than the reasoning of the Federal Magistrate at first instance and that also makes appropriate the application of the usual rule. 10 Section 6(1) of the Federal Proceedings (Costs) Act 1981 (Cth) provides that subject to the Federal Court of Australia Act 1976 (Cth), where a federal appeal succeeds on a question of law, the court that heard the appeal may, on the application of a respondent to the appeal, grant to the respondent a costs certificate in respect of the appeal. In accordance with s 6(3) of that Act, the certificate would state that it would be appropriate for the Attorney General to authorise a payment to the respondent in respect of the costs incurred by the respondent in relation to the appeal. M/s Zhou seeks such a certificate. In our opinion the application for such a certificate should be granted. The difficulties of construction between the provisions of the Migration Act and of the Education Services for Overseas Students Act 2000 as considered in the reasons for judgment on the appeal in this proceeding make apparent the difficulties to which the interrelationship of the respective provisions gave rise. As stated in the reasons, the Migration Amendment Regulations 2006 (No 8) have amended the provisions in Sch 5 relating to student (temporary) (class TU) visas in reg 2.43(2)(b) so as to remove the potential difficulties of construction in interrelating the relevant provisions. There was a genuine question of law to be resolved because the amendment had no applicability to M/s Zhou. In these circumstances, therefore, the application for the certificate should be granted. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Ryan, Nicholson and Lander.