Okwume v Commonwealth of Australia

Apportionment of costs 7 The Court's discretionary power to make costs orders is conferred by s 43 of the Federal Court of Australia Act 1976 (Cth). In Hockey v Fairfax Media Publications Pty Ltd (No 2) (2015) 237 FCR 127 (Hockey) White J said of s 43 (at [37]): Section 43 vests a wide discretion in the Court with respect to costs as the examples in subs (3) indicate. It is, however, a discretion which must be exercised judicially. The principles bearing upon the exercise of the discretion are well developed. The judgment of Toohey J in Hughes v Western Australian Cricket Association (Inc) [1986] ATPR 40-748 at 48,136 is often cited as a starting point: 1. Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order … 2. Where a litigant had succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed … 3. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, 'issue' does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law. … To these may be added the principle that costs are compensatory in nature and not punitive. 8 White J went on to survey the authorities concerning the apportionment of costs by reference to discrete issues determined at trial. The written submissions of the respondent conveniently and correctly summarise the relevant principles by reference to Hockey in the following terms: (1) Courts are now more willing to apportion costs, and are particularly conscious of their role in attempting to control the cost of litigation: Hockey at [88]. (2) Fairness should dictate how the costs discretion is to be exercised and if an issue by issue approach will produce a result that is fairer than the traditional rule then it should be applied: Hockey at [89], quoting from Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107 at [5] per Finkelstein and Gordon JJ. (3) Courts should not be "reluctant to recognise the existence of exceptional cases" and "should use all proper means to encourage parties to consider carefully what matters they will put in issue in their litigation": Hockey at [90], quoting Commissioner of Australian Federal Police v Razzi (No 2) (1991) 30 FCR 64 at 69, endorsed by the Full Court in Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd (1993) 26 IPR 261 (Gummow, French and Hill JJ). (4) The concept of a separate issue may "relate to any disputed question of fact or law" before the Court. It includes but is not limited to separate claims for different relief: Hockey at [85] (quoting Cretazzo v Lombardi (1975) 13 SASR 4 at 12) and at [91] (quoting James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 (Surf Road) at [34]). (5) An example of a matter involving discrete issues is a case where a respondent has been successful in having an appeal against an earlier decision dismissed, but for reasons other than those raised in the respondent's Notice of Contention: Hockey at [91] (quoting Surf Road at [34]). 9 The parties each urged the Court to fashion an order for costs in such a way that would avoid any further dispute as to apportionment or quantification. 10 The respondent accepted that the Commonwealth should not receive all of its costs, the applicant having succeeded in his claim founded in false imprisonment in respect of his initial period of detention. It was submitted, however, that the applicant had been unsuccessful in respect of every issue to which any significant time at trial had been devoted and that the circumstances therefore justified a departure from the ordinary course that the costs follow the event. 11 I accept that the matter is one in which it is appropriate to have regard to the "outcome" by reference to the discrete issues raised and determined in the proceedings. 12 The trial proceeded over six days. A significant period of that time was devoted to the question of whether Mr Andersson, being the person who initially detained the applicant, reasonably suspected the applicant to be an unlawful non-citizen: see s 189 of the Migration Act 1958 (Cth). The respondent, being the party bearing the onus of proof on that issue, adduced evidence from Mr Andersson. The respondent also called Mr Kriss, being a document examiner upon whose conclusion Mr Andersson had relied. The evidence of those witnesses and the oral submissions in relation to them consumed a considerable portion of the trial. The Court acted upon that evidence in determining the substantive factual issues arising on the false imprisonment claim, including the issue of whether Mr Andersson had the requisite state of mind. Time at the trial was devoted to that issue by reason of the respondent's positive plea that the initial imprisonment of the applicant was lawfully justified. The respondent ran its case not only in response to the applicant's pleaded facts concerning the lawfulness of the imprisonment, but also in response to the applicant's alternative (and correct) plea that it was the respondent that bore the onus of proof in respect of the issue. The risk undertaken by the respondent was that it may not make out its own pleaded claim that the imprisonment was lawfully justified by reference to the state of mind of the relevant detaining officers. The respondent called Mr Andersson and Mr Kriss for the purpose of discharging its onus but was ultimately unsuccessful in respect of the actions of Mr Andersson. The circumstances as I have described them (particularly the practical consequences of the reverse onus of proof) weigh heavily in favour of a costs order against the respondent in respect of most if not all of the time at trial devoted to the false imprisonment claim. Very little time at trial was devoted to the lawfulness of the actions of the other two detaining officers forming the subject of the respondent's closing submissions, namely Ms O'Connell and Ms Trad. 13 The misfeasance claim stands in a different category. The applicant was unsuccessful in that claim on multiple bases. I am satisfied that the claim was one that was alleged independently of the false imprisonment claim and that the cost of the trial was significantly increased by it. Although the respondent had filed an affidavit of Ms Grau, she was a witness who was ultimately called by the applicant. Counsel for the applicant contended that the applicant felt impelled to "test" the liability of Ms Grau given all of the surrounding circumstances before and after the date upon which the applicant's visa expired. That may well be the case, however, the misfeasance claim was founded in large part upon an incorrect factual premise that Ms Grau had the requisite state of mind to found such an action and the incorrect legal premise that the (so-called) Alt Report (referred to at [198] to [202] of the primary judgment) in some way affected the validity of the original decision to cancel the applicant's visa. Whilst a party may well feel impelled to "test" the actions of a Commonwealth officer by the vehicle of litigation, he or she must proceed with careful regard to the risks that the action will be unsuccessful on the facts or the law or both. The respondent should not be required to pay the applicant's costs of prosecuting a case in relation Ms Grau against those risks. I am satisfied that the respondent itself ought be compensated for its costs of and incidental to that part of the proceeding. 14 The negligence claim has similar features. Much of the evidence given by the applicant himself bore on this aspect of the proceedings. The Court heard evidence from expert witnesses both in relation to the allegation of liability and in relation to the allegation of loss. A significant portion of damages claimed in the proceedings was attributable to this aspect of the applicant's case. The reasons given for the failure of the claim founded in negligence are consistent with the matters pleaded in the respondent's defence. Again, it was for the applicant to formulate and prosecute his action having proper regard to the risks that the claim might fail on the facts or the law or both. In the circumstances of this case, it is inappropriate that the respondent be made to compensate the applicant in relation to this aspect of his claim. 15 I reject the applicant's submission that the proceedings were sufficiently analogous to matters in which issues of considerable public importance are agitated, particularly matters affecting the liberty of the individual, such that the applicant should not be made to pay the respondent's costs, even if unsuccessful. The relevant principles are summarised by Black CJ and French J in Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 (at [17] and [25]): 17 … In Liversidge v Anderson [1942] AC 206 Lord Atkin intimated to counsel for the Home Secretary who was the successful respondent in that case, being of very general importance, was not one in which costs should be asked for. Counsel for the Home Secretary replied (at 283): '… in those circumstances I should not dream of asking for them on behalf of the Home Secretary.' A more recent example of this approach may be seen in the Full Court of the Federal Court in Perrett v Commissioner for Superannuation (1991) 29 FCR 581; 23 ALD 257. That case was heard by a Full Court in the exercise of original jurisdiction pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). In declining to make an order for costs in favour of the successful respondent the Court said (at 594; 269): 'The court should consider the matter of costs, bearing in mind the result of the appeal but also taking into account the reasonableness of the applicant in bringing that appeal and the general importance of the clarification of the law for such an authority as the respondent.' In this context Gaudron and Gummow JJ pointed out in Oshlack v Richmond River Council (1998) 193 CLR 72 at 89: 'As the practice in this Court testifies, an applicant for special leave to appeal may be required to undertake to bear, in any event, an order for the costs of the other party to the appeal.' ... 25 The public interest may be seen to converge with that of the individual in cases in which the liberty of the individual is at issue. In Cabal v United Mexican States (No 6) (2000) 113 A Crim R 227; 174 ALR 747 Goldberg J said (at 232 - 233 [22]; 753 [22]): 'Although an order for costs is made to compensate a successful party for the expenses incurred in responding to an application or proceeding, that principle of compensation should yield in favour of the principle that a person detained by authority of the State should not be deterred by a potential costs order from seeking his or her liberty. There is a public interest in ensuring that persons detained against their will should not have any impediment put in their way which will inhibit them in seeking their liberty. In my view that public interest outweighs the general rule that a successful party is to be compensated for its costs by the unsuccessful party. In particular is this so where the costs are incurred by the State under whose authority the person is detained.' The passage cited was approved (although not applied in relation to the appeal) by the Full Court in Cabal v Secretary, Department of Justice (Vic) [2000] FCA 1227 at [5] and [8]. As Brennan J said in Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 523, citing Lord Herschell in Cox v Hakes (1890) 15 AC 506 at 527, the law of this country is very jealous of any infringement of personal liberty. The writ of habeas corpus safeguards against any such infringement. This is evidenced in the special feature that it may be applied for by any person: Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 per Gleeson CJ and McHugh J at 600, Gummow J at 627 and Kirby J at 625 - 627. The special rule reflects the purpose to which the writ and orders in the nature of habeas corpus are directed - the protection of individuals against the erosion of their right to be free from wrongful restraints upon their liberty: Jones v Cunningham (1963) 371 US 236 at 243. That is not to say, however, that a new rule is introduced to displace the ordinary rule in every case that concerns the liberty of the individual. The award of costs must remain an exercise of discretion having regard to all the circumstances of the case. 16 The applicant did not seek an order in these proceedings securing his personal liberty. Rather, he sought an award of damages for the wrongful deprivation of his liberty and for breach of duty in relation to fires occurring at the place of his detention. The desirability that a person not be deterred by a potential costs order from seeking his or her liberty, as identified in Cabal v United Mexican States (No 6) (2000) 174 ALR 747 is not directly impinged in such a case, although I do accept that the principles might extend to cases in which the outer limits of the law governing the authority to detail in a particular factual and legal context are tested. I do not consider that the present case is one that raised legal issues of such considerable importance that the applicant should be compensated for his costs of that portion of his claims that ultimately failed. 17 An order for costs is compensatory. Ultimately, the Court has a role in controlling the costs of litigation. In making an order that a party be compensated for costs, the Court should have proper regard to the choices made by litigants at all stages of the proceedings that have significantly affected the scope of the factual and legal issues in dispute, the consequent costs of the proceedings and, potentially, the prospects of settlement. As I have mentioned, those choices must necessarily involve an assessment of risks. Where a party assumes the risk that his or her prosecution or defence of a discrete cause of action may be unsuccessful, it is generally undesirable that the party nonetheless be compensated for his or her costs in respect of that part of the claim. Each case, however, must turn on its particular circumstances. 18 Accepting the invitation to approach the question of costs in a pragmatic and broad brush way, I considered it undesirable to make orders requiring apportioned payments by each party to the other. I so ordered that the parties bear their own costs. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Charlesworth.