Federal Court of Australia

Gehlert v Minister for Immigration and Multicultural Affairs [2024] FCAFC 129

ORDERS

THE COURT ORDERS THAT:

1.    The name of the first respondent be amended to read “Minister for Immigration and Multicultural Affairs”.

2.    Leave to appeal be granted.

3.    The appeal be allowed.

4.    Orders 2 and 3 of the orders made by the Federal Circuit and Family Court of Australia (Division 2) on 29 June 2023 be set aside.

5.    In lieu thereof, order that the first respondent pay the appellant’s costs, fixed in the sum of $6,377 together with interest from 29 June 2023.

6.    The first respondent pay the appellant’s costs of the appeal as agreed or taxed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

1    The appellant Mr Toomas Gehlert appeals from orders made by the Federal Circuit and Family Court of Australia (Division 2) in Gehlert v Minister for Immigration, Citizenship and Multicultural Affairs [2023] FedCFamC2G 563 (the FCFCOA judgment).

2    It is common ground that leave to appeal is required. The Minister consents to leave being granted and it is clearly appropriate for that to occur, as the points raised on behalf of the appellant have wider application to migration proceedings before the FCFCOA. They also have merit.

Background

3    On 9 June 2021, the appellant sought judicial review of a decision of the Administrative Appeals Tribunal made on 5 May 2021, affirming a decision of the Minister for Immigration and Multicultural Affairs to refuse to grant a Visitor (Class FA) visa.

4    The Minister subsequently agreed the Tribunal decision should be set aside. On 8 March 2022, the FCFCOA ordered, in part:

The Court orders, by consent, that:

1.    A writ of certiorari issue directed to the Administrative Appeals Tribunal quashing the decision of the Administrative Appeals Tribunal dated 5 May 2021.

2.    A writ of mandamus issue directed to the Administrative Appeals Tribunal requiring it to determine the application made to it for review of the decision of a delegate of the first respondent dated 16 October 2019 according to law.

3.    The first respondent pay the applicant’s costs as assessed by the Court.

5    There was no agreement on the amount of costs payable, and submissions were made.

6    The appellant sought an order that the Minister pay the appellant’s costs in the sum of $6,377.

7    The costs sought by the appellant comprised:

(a)    $3,047, as the most applicable ‘scale’ amount at the time the appellant commenced his judicial review proceeding ($3,737), adjusted downwards to exclude the previously set filing fee of $690; and

(b)    $3,330, being the filing fee payable under the Federal Court and Federal Circuit Court Regulation 2012 (Cth) to file the appellant’s judicial review application.

8    In contrast, the Minister submitted costs should be fixed in the sum of $3,930. This was the ‘scale’ costs sum after 1 September 2021, as set out in Div 1 of Pt 2 of Sch 2 to the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth). The sum of $3,930 was the amount set out in Pt 2 of Sch 2 for what the parties agreed was the applicable stage the proceeding had reached before it was finalised by consent, namely after the first Court date but prior to any final hearing.

9    In other words, the Minister resisted an order that included the $3,330 filing fee as an additional amount of costs, but used the scale at the time the substantive orders were made in March 2022. The Minister also contended the parties should each bear their own costs of the costs dispute.

10    There was no debate that in fact the appellant had paid the filing fee. Nor did the Minister contest that the claimed sum of $3,047 represented professional costs charged by the appellant’s solicitors to him for legal services performed.

11    The FCFCOA accepted the Minister’s submissions and ordered (relevantly):

The Court orders that:

…

2.    The first respondent pay the applicant’s costs in the sum of $3,930.

3.     The parties are to each bear their own costs of and incidental to the costs dispute.

12    Where necessary, we shall return to the reasoning in the FCFCOA judgment in more detail below.

The filing fee regime

13    Section 285(2) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) provides, in part, that the Governor-General may make regulations prescribing the fees to be paid by litigants:

285    Regulations

…

(b)    fees to be paid in respect of all or any following:

(i)    proceedings in the Federal Circuit and Family Court of Australia;

(ii)    the service or the execution of the process of the Federal Circuit and Family Court of Australia (Division 1) by officers of the Court;

(iii)    the service or the execution of the process of the Federal Circuit and Family Court of Australia (Division 2) by officers of the Court;

(iv)    services provided by the Federal Circuit and Family Court of Australia in circumstances other than where a court orders or directs the provision of the services;

(c)    exemptions from fees covered by paragraph (b);

(d)    the waiver, remission or refund of fees covered by paragraph (b);

…

14    The Federal Court and Federal Circuit and Family Court Regulations 2022 (Cth) set out the fees payable for filing documents in a proceeding in the Federal Court of Australia and in the FCFCOA, other than a family law proceeding. The Regulations also contain provisions regarding the administration of fees, including their indexation and how they may be deferred, refunded, reduced or waived. The Regulations replace the Federal Court and Federal Circuit and Family Court Regulations 2012 (Cth) which were due to sunset on 1 April 2023. The FCFCFC Regulations were itself a replacement to the FCFCC Regulation.

15    Part 1 of Sch 1 of the Regulations lists the fees payable for proceedings in the Federal Court of Australia and Pt 2 of Sch 1 lists the fees payable for proceedings in the FCFCOA, other than family law proceedings.

16    Regulation 2.20 provides for the annual increase in fees listed in Sch 1. The fees are increased annually in accordance with the upwards movement in the All Groups Consumer Price Index published by the Australian Statistician.

17    On 1 July 2015, the filing fee for a proceeding (including a migration proceeding) in the Federal Circuit Court of Australia (as it was previously known) was $600: FCFCC Regulation, Sch 1, Pt 2, item 201.

18    As at 1 July 2018, in accordance with the annual fee increase set out in reg 2.20 in the FCFCC Regulation, the combined filing fee had increased to $665.

19    Subsequently, the filing fee in the FCFCC Regulation was split into two separate fees: one for a general FCFCOA proceeding (item 201) and one for a proceeding commenced under s 476 of the Migration Act 1958 (Cth) (item 201A). On 9 June 2021, when the appellant filed his judicial review application, the general FCFCOA filing fee was $690 while the full fee for a migration proceeding had increased to $3,330.

20    The increase in the filing fee for migration proceedings was the subject of an unsuccessful disallowance motion in the Senate on 23 February 2021: Australia, Senate, Parliamentary Debates, 23 February 2021, p 1289. The reason given in the extrinsic material for the fee increase was to “bring the Federal Circuit Court application fees in line with the Federal Circuit Court’s placement in Australia’s court hierarchy”: Federal Court and Federal Circuit Court Amendment (Fees) Regulations 2020 (Cth) Explanatory Statement, p 1.

21    Currently, as of 1 July 2024, item 201 of the Regulations provides that the filing fee for a general FCFCOA proceeding is $815.

22    Item 201A for migration proceedings sets the same fee at $3,920, with a reduced fee of $1,960 if an individual can demonstrate financial hardship. Regulation 2.06A(2)(d) provides that if, in the opinion of the relevant Registrar or authorised officer, the payment of the reduced fee would also cause financial hardship to the individual, the individual can be exempt from paying both the full fee and the reduced fee.

Reasoning

23    Having been successful, the appellant applied for a costs order reflecting the general approach that a successful party should be compensated for their costs of a proceeding to a level that is fair and just in the circumstances: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [67] (McHugh J); Northern Territory v Sangare [2019] HCA 25; 265 CLR 164 at [25] and [27] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ).

24    The FCFCOA has a general jurisdiction to award costs, subject to any modification of that jurisdiction by particular legislation: s 214(2) of the FCFCOA Act. The exercise of that jurisdiction involves a discretionary power, but one which is expressed differently to the costs discretion of this Court (in s 43 of the Federal Court of Australia Act 1976 (Cth)).

25    Section 214(3) of the FCFCOA Act provides:

214    Costs

…

(3)     Except as provided by the Rules of Court or any other Act, the award of costs is in the discretion of the Federal Circuit and Family Court of Australia (Division 2) or Judge.

(Emphasis added.)

26    The emphasised words more obviously allow for the discretionary power to be made subject to express or implied limits, or to be given further content, in particular circumstances. The central issue on appeal is the extent to which the GFL Rules have affected the discretion conferred by s 214(3) of the FCFCOA Act.

27    While the costs discretion may be exercised by a Court of its own motion (see, for example, r 22.03(1)(b) of the GFL Rules), more usually a party will apply for the costs discretion to be exercised.

28    Relevantly to the FCFCOA, the ability to make a costs application is not found in the FCFCOA Act but in the GFL Rules.

29    In considering the relevant GFL Rules, it is important to bear in mind the distinction between the making of appropriate costs orders and the mechanisms by which the amount of costs that might be recovered pursuant to those orders is to be assessed. The Court may make an order that deals with both aspects by stating that a party is to pay costs in an amount specified in the order. However, more commonly, a costs order will identify the costs the subject of the order (say the costs of the proceeding or of an interlocutory hearing) and also identify the party who will bear those costs, leaving for separate and later determination (or agreement) the amount of costs to be paid.

30    So, in what follows, it is necessary to distinguish between the GFL Rules that address the costs orders that might be made and the GFL Rules that address the process of assessment of the amount of costs to be paid pursuant to those orders.

31    Rule 22.02(1) of the GFL Rules provides that:

Order for costs

(1)    An application for an order for costs may be made:

(a)    at any stage in a proceeding; or

(b)    within 28 days after a final decree or order is made; or

(c)    within any further time allowed by the Court.

32    As to the mechanisms by which the amount of costs that may be recovered pursuant to a costs order, r 22.02(2) provides:

(2)    In making an order for costs in a proceeding, the Court may:

(a)    set the amount of the costs; or

(b)    set the method by which the costs are to be calculated; or

(c)    refer the costs for taxation under Part 40 of the Federal Court Rules; or

(d)    set a time for payment of the costs, which may be before the proceeding is concluded.

33    This provision appears in Div 22.2, which is headed “Orders for costs”. The provision is generally expressed and should be so construed. It applies to all General Federal Law proceedings, unless by reason of the text, context and purpose of a particular provision, its application should be construed as modified or excluded. It provides a number of options to the Court when it exercises the discretion conferred by s 214(3) of the FCFCOA Act.

34    After r 22.02, there are further rules that deal with the type of orders as to costs that may be made by the Court. They provide for orders that specify the maximum costs that may be recovered (r 22.03, being a costs capping mechanism), orders that costs are reserved (r 22.04), orders as to costs if proceedings are transferred to this Court (r 22.05) and orders as to costs against a lawyer (r 22.06).

35    Division 22.3 of the GFL Rules then contains provisions that deal with the process for quantification of the amount of costs to be paid (if not specified in the order), stating in part at r 22.08 that:

22.08    Application of Division 22.3

(1)     This Division applies to costs payable, or to be taxed, under an Act, these Rules or an order of the Court, in a proceeding.

…

36    These words indicate the extent of application of the rules that follow. Importantly for present purposes, r 22.08 is expressed in terms that contemplate that the Court has determined (under Div 22.2 of the GFL Rules, read with s 214(3) of the FCFCOA Act) that particular costs are payable by an identified party but has (a) not specified the method for assessment of the amount of costs; or (b) provided for the costs to be taxed. Therefore, the division does not apply where the Court has exercised its discretion under r 22.02(2)(a) to “set the amount of the costs”. It also applies subject to any costs capping order that has been made as to the maximum costs that may be recovered.

37    It may be accepted that in deciding whether to make an order that sets the amount of costs, the Court will have regard to what would occur if the amount was determined under Div 22.3. However, the power to set costs is not otherwise qualified or limited by reference to the terms of Div 22.3.

38    As to the amount of costs that might be recovered, r 22.09 provides:

22.09     Costs and disbursements

Unless the Court otherwise orders, a party entitled to costs in a general federal law proceeding (other than a proceeding to which the Bankruptcy Act 1966 applies) is entitled to:

(a)     costs in accordance with Schedule 2; and

(b)     disbursements properly incurred.

Note 1:     For costs in a proceeding to which the Bankruptcy Act 1966 applies, see Part 13 of the Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021.

Note 2:     For costs in a migration proceeding, see rule 29.13 and Part 2 of Schedule 2 to these Rules.

39    This provision assumed some importance in both parties’ arguments, as did the notes at the end of it, especially Note 2.

40    This is one of the GFL Rules contemplated by the chapeau to s 214(3) of the FCFCOA Act. By the use of the phrase “Unless the Court otherwise orders”, r 22.09 creates two “default” costs regimes for GFL proceedings commenced in the FCFCOA : one for all GFL proceedings other than migration proceedings, and one for GFL migration proceedings.

41    By providing that the rule operates unless the Court “otherwise orders”, r 22.09 is recognising that the assessment of costs by reference to Sch 2 and the disbursements properly incurred is to be undertaken subject to the terms of any different orders as to costs. So, as has been mentioned, those orders may set the amount of costs. They may cap the amount of costs that may be recovered. They may provide that a particular disbursement is or is not to be recovered. In making those orders, the Court acts according to the justice of an individual case, and exercises a broad discretion about the fair and just amount of costs that may be recovered by a party who has been determined to be entitled to a costs order, depending on the facts before the Court.

42    Otherwise, r 22.09 splits a party’s entitlement into two categories — “costs” linked to Sch 2, and “disbursements”.

43    It was common ground that neither the term “costs” nor the term “disbursements” are defined in the FCFCOA Act or in the GFL Rules. By reference to G E Dal Pont’s commentary in Law of Costs (5th ed, LexisNexis, 2021) at [1.4]–[1.9], the parties appeared to accept that the two terms were to be given meanings dependent on their contexts. In some contexts, the term “costs” will include disbursements. In others, it may not. The GFL Rules, although made by the Judges of the Court or a majority of them (see s 217 of the FCFCOA Act) are, by operation of s 13(1) of the Legislation Act 2003 (Cth), to have the Acts Interpretation Act 1901 (Cth) applied to their construction.

44    Unless the context suggests otherwise, every word in a statute or legislative instrument should be given work to do and have some meaning and effect: Commonwealth v Baume [1905] HCA 11; 2 CLR 405 at 414 (Griffith CJ); Beckwith v R [1976] HCA 55; 135 CLR 569 at 574 (Gibbs J); Defence Force Retirement & Death Benefits Authority v Chapman [2000] FCA 1804; 63 ALD 351 at [74] (Weinberg J).

45    Rule 22.09 of the GFL Rules refers, distinctly, to “costs” and to “disbursements properly incurred”. In that context, the former term should not be construed as wholly including the latter; such a construction would defeat the plain intention of the provision, which is to allow for an entitlement to both kinds of compensation.

46    Thus, the rule confers on a party who has obtained a costs order that does not specify the amount of costs to be paid an entitlement to costs in accordance with one of two scales, depending on what kind of proceeding is in issue and then separately confers an entitlement to apply for payment of “disbursements properly incurred”.

47    Further, the term “disbursements properly incurred” in r 22.09 should be construed as including filing fees. A filing fee is a disbursement: it is paid to (but not retained by) the Court and it is required to be paid (as is the case here) for a proceeding to be commenced, unless a waiver has been granted. In that sense, it has unequivocally been “properly incurred”.

48    In addition, as has been explained, the reservation “Unless the court otherwise orders” allows the full costs discretion in s 214(3) to be engaged. In any given case, the Court might “set the amount of costs” at a level that exceeds the Sch 2 scale. Or it might set a lesser amount. It might fix a separate amount for disbursements. Or it might not allow disbursements because it may consider they were not “properly incurred”.

49    Thus, if r 22.09 applies because the proceeding is a GFL proceeding other than a bankruptcy proceeding, a successful litigant nevertheless may seek an order varying the amount that would otherwise apply (by applying for an order that the amount be assessed without regard to the limits in Sch 2 or that an order include a specified amount not provided for by Sch 2), or they may seek an order for costs in terms that would mean that Sch 2 applies on its terms, by the use of the phrase “in accordance with” either Pt 1 or Pt 2 of Sch 2. Also, if a costs capping order is made, then that will limit the amount of costs to which the party might otherwise be entitled pursuant to an order for costs.

50    As to the presence of Note 2 under r 22.09, it was common ground that since 2011, s 13 of the Acts Interpretation Act 1901 (Cth) has provided that notes form part of the legislation and need to be given effect in any constructional choices. That said, notes are not operative provisions in the sense of conferring or affecting statutory power; they are a road map to assist in the navigation of a legislative scheme, and they point the reader to provisions which may interact with or affect the provision under consideration: CPCF v Minister for Immigration and Border Protection [2015] HCA 1; 255 CLR 514 at [24] (French CJ); Director of Public Prosecutions v Walters [2015] VSCA 303; 49 VR 356 at [50]–[51] (Maxwell P, Redlich, Tate and Priest JJA). The presence of this note alerts the repository of the power to the existence of some specific costs provisions dealing with migration proceedings. The terminology used does not manifest an intention that the rule to which reference is made (r 29.13) is a rule that applies to the exclusion of the general provision in r 22.09. The terminology is entirely neutral as to the interaction between r 22.09 and r 29.13. This is consistent with the terms of r 22.09 which apply to “general federal law proceedings” (a term that includes migration proceedings). The way in which r 22.09 and r 29.13 interact is not indicated by the terms of Note 2 and its terms do not assist with the resolution of that issue. The Minister's submission to the effect that Note 2 provides that it is r 29.13 (and not r 22.09) that applies to migration proceedings must be rejected.

51    Further, Note 2 addresses a different case to Note 1 which concerns bankruptcy proceedings. As has been explained, proceedings to which the Bankruptcy Act 1996 (Cth) applies are excluded from r 22.09. Hence, Note 1 directs attention to different rules in cases where the Bankruptcy Act “applies”. In context, Note 1 is indicating that it is the Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth) that apply to proceedings to which the Bankruptcy Act applies. The presence of Note 1 (which deals with cases which are expressly excluded from r 22.09) does not provide a foundation for giving Note 2 a meaning which would treat r 22.09 as if it expressly excluded migration proceedings (in the same way that the rule expressly excludes bankruptcy proceedings).

52    Rule 29.13 is within Pt 29 of the GFL Rules. Part 29 is headed “Proceedings under the Migration Act 1958”. Rule 29.02 identifies the proceedings to which Pt 29 applies. Division 29.2 makes specific provision concerning the commencement of migration proceedings. These include how a judicial review application of a migration decision must be commenced and what material should be provided (r 29.05) and the response to an application for judicial review of a migration decision (r 29.06). Division 29.4 deals with general matters in migration proceedings, including the giving of directions by the Court or a Registrar (r 29.11), the issue of writs (r 29.12) and — relevantly — some provisions about costs (r 29.13).

53    Rule 29.13 provides:

29.13    Costs

(1)     The Court may, in relation to a proceeding that is concluded, order an unsuccessful party to the proceeding to pay the costs of a successful party in accordance with Division 1 of Part 2 of Schedule 2.

(2)     If:

(a)     the applicant files a notice of discontinuance in a proceeding in which a respondent has sought costs in the response; and

(b)     the applicant does not file with the notice an application in respect of costs;

a Judge or a Registrar may, without hearing the parties, make an order in chambers in accordance with Division 2 of Part 2 of Schedule 2 for the costs of the respondent.

(3)     This rule does not limit a party’s right to apply, under Part 22, for an        order as to costs of the application.

Note 1:     See Division 13.1 of these Rules in relation to discontinuance.

Note 2:     See section 136 of the Act in relation to the exercise of jurisdiction in chambers.

54    Before considering the meaning of r 29.13, the references to Sch 2 require some explanation. As has been noted, r 22.09 states that a party is entitled to costs in accordance with Sch 2 and disbursements properly incurred.

55    Schedule 2 sets out a number of tables. Each table has a list of items with a description of the item and an amount of costs for the item. Part 1 of Sch 2 is headed “General federal law proceedings other than migration proceedings”. Part 2 of Sch 2 is headed “Migration proceedings”. Part 2 has two divisions. Division 1 is headed “Migration proceedings that have concluded”. It contains only three items, each of which describes a different point at which proceedings may have concluded. There is a single lump sum for each item. There is no separate provision for disbursements. Division 2 is headed “Migration proceedings that have been discontinued”. It has four items and follows a similar structure by referring to different points at which proceedings may have been discontinued.

56    As to disbursements, the form of Pt 2 may be contrasted with the form of Pt 1 of Sch 2 which includes separate items for disbursements, one of which is in the following terms (item 11): “Disbursements—Court fees and other fees and payments to the extent that they have been reasonably incurred”. As to the amount it provides: “The amount of the fees and payments”.

57    Returning to the terms of r 29.13, it can be seen that it refers to two types of orders:

(1)    an order that an unsuccessful party pay costs of the successful party under a specific part of Sch 2 that relates to migration proceedings (r 29.13(1)) (a Pt 2 Div 1 Costs Order); and

(2)    an order that the applicant who files a notice of discontinuance must pay costs in accordance with a different part of Sch 2 that relates to migration proceedings (a Pt 2 Div 2 Costs Order).

58    As to each type of order, r 29.13 provides that the Court “may” make such an order. Each of the two types of orders specifies the amount of costs that may be recovered by referring to either Div 1 or Div 2 of Pt 2 of Sch 2. That is to say, the form of order will require assessment to be undertaken by reference to the relevant division in Pt 2 of Sch 2.

59    However, significantly for present purposes, the terms of r 29.13(3) expressly provide that the rule does not limit the party's right to apply under Pt 22 “for an order as to costs of the application”.

60    As has been explained, Pt 22 deals with the types of orders that may be made (Div 22.2) and also with the way in which costs are to be assessed if the order does not specify the amount of costs (Div 22.3). It appears that the terms of r 29.13(3) are concerned to reserve the possibility that orders other than a Pt 2 Div 1 Costs Order or a Pt 2 Div 2 Costs Order may be made in a migration proceeding. That is to say, it ensures that the panoply of cost orders may be made in migration proceedings, including orders which “set the amount of costs”, cap the costs that may be recovered or specify particular disbursements that may or may not be recovered. However, even if that is the case, an issue remains as to the role to be played by the terms of Pt 2 of Sch 2 in deciding the appropriate terms of an order for costs that is not a Pt 2 Div 1 Costs Order or a Pt 2 Div 2 Costs Order. In particular, in deciding whether to set the amount of costs or allowing specified disbursements, must the Court have regard to the extent of costs provided for in Pt 2 of Sch 2?

61    Resolution of these matters turns upon the proper construction of r 29.13 considered in the context of the general provisions as to costs in Pt 22 of the GFL Rules.

62    There was a debate between the parties about the proper construction of the word “may” as used in r 29.13(1). The Minister sought to characterise the word “may” as doing no more than empowering the making of an order of the specified kind. It was contended that the permissive terminology did not manifest an intention to allow for the making of an order that departed from those parts of Sch 2 that related to migration proceedings and that “ordinarily it will be appropriate for the Court not to do so” ([15] of the Minister’s submissions).

63    We do not accept the narrow reading given to r 29.13(1) by the Minister. As has been explained, it is not a construction that is indicated by the terms of Note 2 to r 22.09. Further, it is a construction that would operate as a limit upon the party’s right to apply under Pt 22 for a costs order, contrary to the express terms of r 29.13(3). As explained, those rights include the ability to seek an order that costs be fixed in an amount that is appropriate in all the circumstances having regard to the terms of Sch 2.

64    This informs what we consider to be the correct meaning of “may” in r 29.13(1). We consider the word to be permissive in this context. Contrary to the Minister’s submissions, it is not an empowering term. The discretionary power to award costs, and the additional content given to that power, are found elsewhere as we have explained.

65    Rule 29.13 is, of course, a specific power conferred in relation to migration proceedings, as are the powers in rr 29.10, 29.11 and 29.12. It provides the Court with the option of a specific quantification of a successful party’s costs in a migration proceeding. Rule 29.12, which deals with writs, uses the imperative “must”; r 29.13 does not. Similarly, r 29.11, which deals with directions and orders, also uses “may”. The intention is to provide content to various discretions, but not to require their exercise in a particular manner.

66    However, the presence of r 29.13, and the presence of Pt 2 of Sch 2 in the scheme for the award of costs by the FCFCOA in migration proceedings evinces an intention that any application for costs be measured or assessed in a context where the Court (or Judge) is conscious that a majority of the Judges of the Court have agreed to fix a scale of costs considered to be generally applicable to migration proceedings, and considered to provide an express benchmark for what may be seen as fair and just in a given case.

67    The same is true of Pt 1 of Sch 2 in relation to GFL proceedings other than migration proceedings. However, the critical point is that both parts of Sch 2 are to operate as benchmarks or guidance, informed as they are by the external review processes to which the parties referred in argument, and consideration of what is likely to be incurred in conducting proceedings in the GFL jurisdiction. It remains up to an individual Judge, in the particular circumstances of the case before them, and being faithful to the broad discretion in s 214(3) of the FCFCOA Act, informed by r 22.02 of the GFL Rules, to decide if the scale costs are in fact fair and just in the circumstances of the particular costs application before the Court.

68    To be clear, in our view, the arrangement and headings to Pt 1 and Pt 2 of Sch 2 make it clear that one is not to apply to migration proceedings (Pt 1) and one is to apply to migration proceedings (Pt 2). There is no other way sensibly to read the title to Pt 1: “—General federal law proceedings other than migration proceedings” (emphasis added).

69    Although it is not pertinent to the disposition of this appeal, the result of our conclusion is that the same approach we have outlined in relation to Pt 2 should also apply to Pt 1 in all GFL proceedings other than migration proceedings. The specific amounts set out in Pt 1 are intended to serve as a benchmark for what the Judges of the Court, or a majority of them, consider to be fair and just in a given case. They do not entirely or completely constrain the wider discretion found in s 214(3) of the FCFCOA Act, and preserved by r 22.09, the latter being expressly prefaced with the words “Unless the Court otherwise orders”, and also expressly preserving the power of the Court to order “costs” in accordance with Sch 2 and disbursements.

70    Therefore, we do not approach r 29.13 in the way the FCFCOA judgment did. Contrary to its reasoning, and to the Minister’s submissions, the legislative scheme on the whole does not constrain a Judge to apply the singular “scale” shown in Pt 2 of Sch 1, and does not impose on an applicant for costs any burden to prove that departure from that sum is justified or warranted.

The correct interpretation of Pt 2 of Sch 2 in light of its omission of any express reference to “disbursements”

71    The appellant contended the Court should give weight to the text of r 22.09, and its separate references to “costs” and “disbursements”. The appellant employed this textual indication to submit that in Pt 2 of Sch 2 — dealing with migration proceedings — the singular scale figure should not be interpreted as including disbursements. We do not consider that is the correct approach.

72    The singular scale figures in Pt 2 are plainly designed to be “all in” amounts of costs. That is, they potentially include disbursements as well as professional fees. There are many different expenses which fall under the description of “disbursements” — counsel fees, interpreter fees, expert witness fees and courier fees, to name a few. These kinds of disbursements may all be contemplated by the contractual arrangement between a solicitor and client. There are then different kinds of disbursements unconnected with the contractual relationship, such as those imposed by third parties: daily hearing fees, filing fees, transcript fees.

73    The singular amounts in Pt 2 are intended to accommodate the characteristics of migration proceedings. Some of the processes are formulaic in most matters, in the sense of the procedural steps being very similar. The points at which expert legal skill are applied tend to be the same points in each proceeding. There are few active interlocutory disputes. Procedural orders are often standard form, proposed by parties and made by Registrars. The Minister bears, conventionally, some of the preparatory burdens such as preparing a court book. In many migration proceedings, the largest costs incurred by an applicant may well be counsel’s fees. That is a disbursement. Given the cause of action is judicial review, and the law is complex, counsel may do the majority of the work in a proceeding; a solicitor may do much less. The singular amount in Pt 2 is intended to include disbursements such as counsel’s fees. If that proposition is correct, it is difficult to see how it can, as a singular amount, be interpreted as excluding particular kinds of disbursements such as a filing fee. This is especially so when it is recalled that the filing fee may be reduced or waived entirely for a particular applicant.

74    The preferred interpretation, and the one that best serves the purpose of the identification of scale costs as a singular amount by reference to the stage a proceeding has reached before it is concluded, is that it is up to the individual Judge in each costs application to consider the various components of the costs application made, and whether, in those individual circumstances, a single lump sum for all costs and disbursements that would apply if a Pt 2 Div 1 Costs Order was made would be a fair and just outcome. For example, a successful applicant:

(a)    may have had the filing fee reduced to a minimum amount or waived entirely;

(b)    may have not, in fact, paid a hearing fee;

(c)    may have retained a solicitor for only a short period of time;

(d)    may have paid counsel on a direct access basis a sum which is below the singular scale amount; and

(e)    may not be able to identify any other costs.

75    Without seeking to prescribe any particular outcome, but using these kinds of facts as an example, in such a case a Judge may well form a view that the fair and just exercise of the costs discretion is to fix the amount of costs by reference to the Pt 2 scale, with no additional sums fixed.

76    In contrast, where, as here, a successful applicant paid the full filing fee of $3,330 and incurred a liability for professional costs of his solicitor (including any disbursements charged to him by his solicitor) which was claimed to be in the sum of $3,047, a Judge may form a different view. It is not the character of the filing fee as a disbursement which may — we say may — result in a decision by a Judge not to make a Pt 2 Div 1 Costs Order. Rather, it will be the assessment by a Judge of what is fair and just, given the actual costs incurred.

77    As we explain below, and acting on the correct principles we have outlined above, no presumption should be erected about the appropriateness or otherwise of a Pt 2 Div 1 Costs Order and nor should any requirement to justify a reason to depart from the singular amount set out be imported as some kind of preliminary step. It is unlikely to be a reasonable exercise of the costs discretion to fix an amount of costs which would result in a successful applicant doing little more than recovering the filing fee they had to pay to commence the proceeding, and not requiring the unsuccessful party to compensate a successful applicant for a reasonable amount of the legal costs incurred in prosecuting the proceeding to its successful conclusion. Where the successful party had not engaged in any disentitling conduct, such an approach would be incompatible with the basic compensatory principle applied in an Australian costs jurisdiction and recognised in s 214(3) of the FCFCOA Act. Such a situation may also be incompatible with access to justice principles as filing fees are capable of affecting access to justice.

78    To find as much is to do no more than find that in the exercise of the discretion conferred by s 214(3), read with r 22.02 of the GFL Rules, the fair and just costs order is one which sets the amount of costs on the appellant’s costs application in his judicial review proceeding not at the singular scale figure in Pt 2 (which would apply if a Pt 2 Div 1 Costs Order was made), but a larger amount. To make that finding recognises that the singular scale figure may well include disbursements in a particular case. However, in another case — such as the present — the amount may simply be insufficient and unjust, and the Court may rely on s 214(3), read with r 22.02, to fix a larger amount.

Result of this analysis: the FCFCOA reasons for its orders

79    The result of this analysis is, as we explain in more detail below, that the FCFCOA acted on the wrong principle in determining the appropriate outcome to the appellant’s costs application, and accordingly, its exercise of discretionary power miscarried.

80    That is because it treated r 29.13(1) as operating presumptively as the appropriate amount to fix in response to a costs application in a migration proceeding by a successful party. In taking this approach, the FCFCOA imposed an evidentiary or persuasive burden on the appellant to demonstrate a “good reason” or some kind of exception to the presumption it had erroneously erected, before it would be prepared to depart from Pt 2.

81    At various points in its reasons, the FCFCOA judgment correctly identifies the base proposition that the Court has a discretion whether to award costs, and a discretion as to the amount of costs, and further that this base proposition is applicable to migration proceedings: see, for example, [24], [27], [29], [54].

82    The Court also recognised (at [33] for example) that in migration proceedings, the Court had exercised its discretion in the past to fix an amount of costs beyond the amounts in Pt 2 of Sch 2. Many of the examples given in the FCFCOA judgment from [34]–[47] appear to involve the kind of discretionary considerations one might expect to be at work in fixing an appropriate costs sum, albeit in the cases referred to, largely in favour of the respondent Minister. Some of the extracts use language such as “exceptional” which is erroneous if it is to be understood as erecting some kind of presumption or burden to demonstrate a circumstance is “exceptional” before the Court will entertain fixing costs above the amounts in Pt 2 of Sch 2. Nevertheless, generally these authorities correctly recognise the width of the discretionary costs powers conferred on the FCFCOA.

83    However, at [32], the FCFCOA judgment identified the “critical issue” in the proceeding before it as “whether the costs in the Migration Costs Scale are inclusive of filing fees”. We take the reference to the “Migration Costs Scale” to be a reference to Pt 2 of Sch 2.

84    For the reasons we have explained above, that was not the critical issue in the proceeding. The amounts set out in Pt 2 of Sch 2 may include disbursements. That will depend on how the amount claimed is comprised, and what the Court considers to be the fair and just amount of costs in the circumstances. While we accept the appellant mounted an argument before the FCFCOA to this effect, as part of his submissions about why a costs amount greater than what is specified in Pt 2 of Sch 2 should be fixed, that fact alone did not render it the critical issue in the proceeding.

85    The appellant’s entitlement to an award of costs was not in dispute. The critical issue in the proceeding was whether it was fair and just, in the particular circumstances of the appellant’s claimed amount of costs, that his costs should be limited to $3,930, notwithstanding that he had paid a full filing fee of $3,330.

86    At [54], having again stated the principle generally correctly, the FCFCOA judgment described the question again in terms of disbursement recovery within the confines of Pt 2 of Sch 2:

The Court has therefore, occasionally, made orders for costs above the Migration Costs Scale in migration judicial review proceedings: see [34]-[47] above. The question is whether, in the exercise of its discretion, the Court should do so in these proceedings, effectively to allow Mr Gehlert to recover his filing fee. The answer is “No”, for the reasons set out below.

87    Between [55] and [70], the FCFCOA gives at least 9 reasons for its conclusion.

88    At [55], the first reason involves the error of attributing to the total amounts set out in Pt 2 of Sch 2 an exclusion of any consideration of the level of disbursements incurred. We have explained above why this is not the case at all. The total sum may well include disbursements in a given case. The second reason, connected to the first, also singles out filing fees as not recoverable under Pt 2 of Sch 2. That is also incorrect. For example, a litigant in person who paid a full filing fee of $3,330 and succeeded on judicial review (whether before or at trial) may well be entitled to a costs order fixed in that amount, together with any other disbursements incurred, and that would still be less than the total amount fixed by Pt 2 of Sch 2.

89    At [57], the FCFCOA begins to use language consistent with the imposition of some kind of burden of justifying an amount above the amount in Pt 2 of Sch 2, as if that is the fixed amount which should be awarded in every case. This passage talks of whether there are matters after the filing of a judicial review application that “warrant” an amount above Pt 2 of Sch 2. There is no basis in the legislative scheme for a distinction to be made between payment of a filing fee and what occurs after a judicial review application is filed. As we have explained, payment of a filing fee is an access to justice precondition, unless it is waived. The legislative scheme intends for the Court to be able to consider whether a successful applicant should be compensated for paying it. The same erroneous approach is taken in the FCFCOA judgment at [59] in relation to what is said to be the fourth reason.

90    The fifth reason, at [60], relates on its face to the following of an earlier decision of the then Federal Circuit Court of Australia in AAS17 v Minister for Immigration & Anor [2018] FCCA 3119. However, as we have explained earlier in these reasons, there is no binary proposition to be drawn from the terms of Pt 2 of Sch 2 and the supporting provisions, that the fixed amounts either include, or do not include, disbursements. They may or may not in a given case, depending on what is being claimed, and what costs have been incurred. As we explained, a successful applicant may have had their filing fee reduced, but have had counsel retained on a direct brief, which may well render the fixed amount in Pt 2 of Sch 2 fair and just in the circumstances. If that is so, it is because of the Court’s evaluation of the particular circumstances, not because of any inflexible or binary inclusion or exclusion of disbursements.

91    From [61]–[66], the FCFCOA gives a sixth reason. This reason is not related at all to the individual circumstances of this proceeding, and the appellant’s claim for an amount of costs. It invokes “public policy considerations” (at [63]) which it identifies as the high volume of migration cases in the FCFCOA and then raises at [65] the spectre of “further litigation on costs” in migration proceedings, or adding (unnecessarily and unjustifiably, it is implied) to the “complexity” of migration litigation: see [66]. Respectfully, these concerns are misplaced, and drew the FCFCOA away from its discretionary task on the facts of the costs application before it. Again, disbursements (including filing fees) may well be recoverable in appropriate cases. Just as in some of the cases to which the FCFCOA referred, disbursements incurred by the Minister (such as transcript fees) were allowed. It is not the character of a cost as a disbursement that renders it recoverable or not recoverable. It is what is fair and just in a particular circumstance.

92    There is no basis to consider objectively whether there would be any increase in litigation to unmanageable or inappropriate levels if FCFCOA Judges took into account, in the exercise of their costs discretion in favour of a successful applicant, whether the litigant had paid a filing fee and if so, how much. Payment of a filing fee is an essential and reasonable consideration in the exercise of a costs discretion.

93    The seventh reason (see [67]) returns to the erroneous burden the FCFCOA imposed on the appellant to positively demonstrate his circumstances warrant him receiving an amount of costs “above scale”. That is not, as we have explained, a correct understanding of the manner in which the costs discretion should be exercised by the FCFCOA.

94    The eighth reason relates to an opinion of the FCFCOA that the amounts in Pt 2 of Sch 2 are, intrinsically, not “unjust or unfair”. Expressed at this level of generality, this observation is again, with respect, liable to distract a court from its task in exercising the costs discretion. The question for the Court is, in the particular circumstances proven before it, what is a fair and just amount to fix for the costs of a successful party.

95    Another policy-based observation was made by the FCFCOA at [69], as its ninth reason, relating to the instance where the Pt 2 of Sch 2 amounts fail to “keep pace” with actual costs incurred. Again, the rest of this paragraph treats the Pt 2 of Sch 2 amount as “the norm”, which is simply the incorrect starting point for an exercise of the costs discretion. Reliance on this observation again distracted the FCFCOA from the plain fact in the circumstances of this proceeding that fixing the costs by reference to Pt 2 of Sch 2 would do little more than reimburse the appellant for the full filing fee. It also caused the FCFCOA to avoid any analysis of whether this was a fair and just outcome for the exercise of its discretion.

96    When pressed about where in the reasons the FCFCOA had dealt with the question of what was a fair and just exercise of the discretion where the full filing fee had been paid and would account for almost all of the applicable Pt 2 of Sch 2 amount, the Minister directed the Court to [6] and [68]–[69] of the FCFCOA judgment. We do not accept those passages represent any real analysis by the FCFCOA of whether fixing the appellant’s costs at $3,930 was fair and just in circumstances where he had paid a filing fee of $3,330. Paragraph [6] is no more than a recital of the parties’ competing positions. Paragraphs [68]–[69] both concern matters of generality that have little or nothing to say about the fairness of fixing an amount by reference to Pt 2 of Sch 2 in the appellant’s circumstances. The fact that the FCFCOA did not engage in any such analysis underscores the erroneous approach it took.

97    A similar observation can be made about the last, somewhat dismissive, characterisation by the FCFCOA at [70] that the proceeding was “a simple run-of-the-mill migration judicial review proceeding”. If that observation had been preceded by a careful analysis of what the appellant was claiming, and how that claim was to be measured against the amount set out in Pt 2 of Sch 2, then the characterisation might have had a different flavour. Here it did no more than, again, distract the FCFCOA from its statutory task, and lead it into an erroneous approach.

Conclusion and re-exercise of discretion

98    The appeal is allowed.

99    The parties agreed this Court should re-exercise the costs discretion if it found error in the nature of House v The King [1936] HCA 40; 55 CLR 499. We have found such error. We consider an appropriate exercise of discretion is to fix the appellant’s costs of the judicial review proceeding in the FCFCOA in the sum of $6,377. The professional costs claimed were never suggested by the Minister to be anything but reasonable. Objectively, for the stage the proceeding had reached, we consider they are reasonable, and they sit below the amounts in Pt 2 of Sch 2. An argument on judicial review of jurisdictional error was identified and developed, sufficient to persuade the Minister there was jurisdictional error identified.

100    In addition, the appellant paid the full filing fee of $3,330. A filing fee is a fee paid for access to justice. In this case, it is an objectively large sum of money, more than the entire professional costs claimed. The appellant was required to pay that fee to access the supervisory jurisdiction of the FCFCOA, in order to prove, as he did, that the Tribunal’s decision was affected by jurisdictional error. As a matter of both fairness and justice, he should be compensated for the fee he was required to pay to access that Court.

101    Responsibly, the Minister did not cavil with the proposition that if the appeal succeeded, the Minister should pay the appellant’s costs of and incidental to the appeal. There will be an order accordingly. The Court expects the parties to seek to agree on an appropriate sum and will give them an opportunity to do so. Failing that, the Minister must pay the appellant’s costs as taxed.

Associate:

Dated:    4 October 2024