FEDERAL COURT OF AUSTRALIA

Zentai v Honourable Brendan O’Connor (No 4) [2010] FCA 1385

REASONS FOR JUDGMENT

INTRODUCTION

1                                             In reasons delivered in Zentai v O'Connor and Others (No 3) (2010) 187 FCR 495 (Zentai No 3), I invited the participating parties to make submissions as to the appropriate relief.  Following the exchange of several sets of written submissions, the parties have been able to reach agreement on most of the orders which should be made as a result of those reasons.

2                                             What remains outstanding are disputes first, as to whether or not the applicant (Mr Zentai) should, in effect, be required to remain on bail due to a possible appeal by the Commonwealth (when referring to the respondents collectively I will continue to describe them as the Commonwealth); secondly, whether the orders I can make can deal only with the ultimate surrender decision under s 22 of the Extradition Act 1988 (Cth) (the Act) (the Surrender Decision) and warrant.  The third issue is costs. 

3                                             Although not expressed quite this way, the debate on the relief issue raises, in substance, the balancing of two ideas.  The first is the notion that assuming the relief sought is within power, the Court should grant only such relief as is necessary in order to do justice.  The second is that the entirety of a ‘matter’ constituting the dispute between the parties having been put before the Court to resolve, the Court should, (providing it has power), quell the dispute once and for all (subject of course, to appeal).  The debate arises because I upheld only the challenges to the ultimate surrender decisionand not the challenges to earlier stages of the process under the Act. 

4                                             For reasons which follow, I consider that the relief as sought by Mr Zentai, following several attempts to achieve what I have described as ‘the balance’, does so and is within power. 

5                                             The judicial review of the Surrender Decision sought relief at a broad level.  The jurisdiction of the Court was invoked under s 39B of the Judiciary Act 1903 (Cth) which relevantly provides that the scope of the original jurisdiction of the Court is as follows:

(1)        Subject to subsections (1B), (1C) and (1EA), the original jurisdiction of the Federal Court of Australia includes jurisdiction with respect to any matter in which a writ of mandamus or prohibition or an injunction is sought against an officer or officers of the Commonwealth.

(1A)     The original jurisdiction of the Federal Court of Australia also includes jurisdiction in any matter:

…

(c)        arising under any laws made by the Parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter.

6                                             The relief now sought as a consequence of the conclusions reached in Zentai No 3 was all foreshadowed in the application before the Court.  It was also less specifically foreshadowed by Mr Zentai and considered by the Full Court in Zentai v Republic of Hungary (2009) 180 FCR 225 (the Full Court decision) when the Full Court was exercising a much narrower function under s 21 of the Act.  As I read that decision, the Full Court in substance, anticipated the probability that the course which has been pursued would occur when a challenge to the ultimate surrender decision was made, should it be necessary. 

7                                             As noted in the Background section in Zentai No 3, the decision of the Attorney-General under s 22 is not subject to review under the Act.  Decisions under the Act are also excluded from review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) by virtue of Sch 1 to the ADJR Act.  The decisions are, however, subject to the constitutional writs provided for under s 75(v) of the Constitution and s 39B of the Judiciary Act.  Those writs lie for jurisdictional error but do not permit a review of the merits of a decision.  The Act itself is a code as to the law relating to extradition of persons to extradition countries (s 3(a)).  But the jurisdictional source for the challenge to an ultimate decision under s 22 and s 23 is s 39B of the Judiciary Act.

8                                             For reasons discussed below, the final form of declaratory relief makes it clear (consistently with the reasons in Zentai No 3) that the declaration concerning s 19 of the Act and which is made pursuant to the power in ss 21, 22 and 23 of the Federal Court of Australia Act 1976 (Cth) (FCA) is a necessary incident of the substantive relief and conclusions concerning s 22 of the Act.  There is no basis on which the declaratory relief as ultimately structured has been in some way expressly or by necessary implication ousted by statute.  There is a real issue to which the declaratory relief is directed (Mr Zentai’s freedom from bail) and the answer to the determination of that issue produces a real consequence for the parties.  There is not some hypothetical issue at stake (cf Lockhart J in Aussie Airlines Pty Ltd v Australian Airlines Ltd (1996) 68 FCR 406 (at 415-416). 

9                                             There is no coercive element in a declaration.  It does, however, have res judicata and issue estoppel effects as between the parties (M Aaronson,B Dyer and M Groves, Judicial Review Administrative Action (Law Book Co, 3^rd ed, 2004) p 802).  But a declaration does not create rights.  It merely indicates what they have always been.  It follows that a stay of a declaration pending an appeal would not normally be given (see for example, Arnhem Land Aboriginal Land Trust v Northern Territory (2007) 157 FCR 255).  However, Mr Zentai has acceded to a proposal that the declaratory relief be stayed for a 21 day appeal period.  

10                                          In terms of preservation of the status quo, it is not evident why Mr Zentai should not ‘enjoy the fruits of his victory’ in the usual way.  The effect of the orders to be made will be that they are stayed pending the 21 day appeal period only.  If there is no appeal, the orders become absolute.  If there is an appeal and the Commonwealth considers it necessary to seek other orders pending the appeal, it will no doubt take such measures as it considers appropriate. 

BACKGROUND

11                                          In Zentai No 3, of 13 grounds argued, I upheld grounds 3, 4 and 9 of Mr Zentai’s grounds of review. 

12                                          Ground 3 dealt with the question of whether or not Mr Zentai was ‘accused’ of an offence within the meaning of the Act: see Zentai No 3 (at [177]-[179]).  I held he was not.

13                                          In relation to ground 4, I concluded that by reason of Art 2 para 5(a) of the Treaty on Extradition Between Australia and the Republic of Hungary 1995 (the Treaty) as incorporated into the Extradition (Republic of Hungary) Regulations 1997, Australia must refuse the Extradition Request since there was no relevant ‘extradition offence’ of ‘war crime’ at the relevant time. 

14                                          In relation to ground 9, I concluded that the first respondent erred in law and committed jurisdictional error by failing to take into account relevant considerations when determining, in accordance with Art 3 para 2(f) of the Treaty, whether it would be oppressive and incompatible with humanitarian considerations to surrender Mr Zentai for extradition to Hungary (see Zentai No 3 at [346]). 

15                                          In Zentai No 3 I did not uphold grounds 1 and 2 (indeed they were not ultimately pressed).  They were the second respondent’s initial decision to issue a Notice of Receipt of Extradition Request to a Magistrate pursuant to s 16(1) of the Act (the s 16 Notice) and the third respondent’s decision that Mr Zentai was eligible for extradition and the issue of the warrant on 20 August 2008 pursuant to s 19(9) of the Act committing Mr Zentai to imprisonment in Hakea Prison (the Committal Order). 

16                                          Mr Zentai argues that given the Surrender Decision should be quashed, it is necessary and appropriate to provide ancillary relief in relation to the second and third respondents’ decisions (that Mr Zentai was an ‘eligible person’ (the s 16 Decision) and the Committal Order). 

17                                          The concern Mr Zentai has is that in the absence of such ancillary relief, it may leave the Magistrate’s warrant committing Mr Zentai to prison in place indefinitely or ‘simply hovering’.  Not only would the Committal Order be left hovering but so also would the second respondent’s decision to issue the s 16 Notice on the basis that Mr Zentai was an ‘eligible person’. 

18                                          The Commonwealth argues that because of the failure of Mr Zentai on grounds 1 and 2, it is not now open to ‘attack’ the earlier decisions because the information that he was only wanted for questioning did not come to light until the time of making the Surrender Decision. 

CONSIDERATION

The nature of the relief

19                                          Sections 21, 22 and 23 FCA are directly relevant to the debate.  They provide as follows:

21        Declarations of right

(1)        The Court may, in civil proceedings in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed. 

(2)        A suit is not open to objection on the ground that a declaratory order only is sought. 

22        Determination of matter completely and finally

The Court shall, in every matter before the Court, grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him or her in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided.

23        Making of orders and issue of writs 

The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.

20                                          The Commonwealth accepts (for the purpose of this relief argument) that if the s 22 Surrender Decision was not made in accordance with s 22 of the Act, then the s 23 warrant decision was not a lawful exercise of power (Foster v Minister for Customs & Justice (1999) 164 ALR 357 (at [5]) per Drummond J. 

21                                          However it argues that the only basis upon which the s 16 Decision and the s 19 Committal Order were revisited in Zentai No 3, was in the context of an attack on the s 22 Surrender Decision (see [171], [173] and [183]).  At those paragraphs I said:

171       There is force in the submission made for Mr Zentai that ‘… there is no immutable law of the Medes and Persians…’ that once determined to be eligible at one of the earlier stages of the extradition process, the Minister or the Attorney-General has no option other than to robotically act on those earlier determinations in the face of his positive knowledge that he lacks the proper legal authority for surrender. 

…

173       By 2009, the Minister by Attachment C became aware from Hungary that the ‘criminal proceeding against Mr Zentai is in the investigative phase and no indictment has been lodged so far and consequently there are no criminal proceedings pending … at present.’ 

…

183       It is entirely reasonable to imply into s 22 a requirement that the Minister consider any new material that comes to light which elucidates the status of a person who has been wrongly classified as an ‘extraditable person’ at the first stage.  To ignore such material and approve the surrender of a person despite actual or constructive knowledge that that person is not an ‘extraditable person’ would be to defeat the purpose of the Act.

22                                          Senior Counsel for the Commonwealth, Mr DR Williams QC, submits that there is no legal basis on which to set the s 19 Decision aside and no practical reason why it needs to be set aside.  On the material before the decision-maker, the s 16 Decision was unimpeachable as the ‘not accused material’ only came to light well after the s 16 Decision. 

23                                          Similarly, in relation to the s 19 Committal Order, on the material then before the third respondent, the s 19 Committal Order was unimpeachable and the review procedures under s 21 of the Act were fully exhausted.

24                                          The Commonwealth rejects the submission for Mr Zentai that the Court has sufficient power under s 23 FCA to make the declarations and orders sought in relation to the s 16 Decision and the s 19 Committal Order.  

25                                          The Commonwealth argues that the orders sought by Mr Zentai would, in effect, constitute my setting aside a decision of the Full Court which would be beyond power.  A single judge of the Court cannot ‘interfere with’ a decision of a Full Court.  The Commonwealth relies on Trade Practices Commission v Manfal Pty Ltd (1990) 27 FCR 284 (at 288).  In my view the relief sought here is quite different from the relief under consideration in Manfal.  In Manfal, the respondent company bought a motion for a stay of proceedings which was granted by Lee J.  There was an appeal to the Full Court which ordered that the stay be set aside.  Lee J then made certain programming directions relating to the respondent.  The respondent then made an application for special leave to appeal to the High Court of Australia from the Full Court’s judgment and by a separate motion before French J (Manfal) applied for a stay of the orders of the Full Court until the hearing of the application for special leave to appeal and for an order that the programming directions made by Lee J be set aside.  French J dismissed the motion on the basis that the Court, constituted as a single judge and exercising the original jurisdiction of the Court, does not have power to make an order staying the operation of an order of the Full Court.  Only the Full Court or the High Court would be empowered to make such an order. 

26                                          At that point, however, different conclusions had been reached by both Spender J and Pincus J in separate decisions.  French J summarised the position as follows: 

In my opinion, the nature of the appellate jurisdiction exercised by the Court and the specific powers conferred on it in that jurisdiction are inconsistent with a construction of the power conferred by s 23 that would authorise the making of orders by a single judge interfering with orders made under s 28 by a Full Court. In Patton v Minister for Defence (1987) 13 FCR 476, Pincus J considered that, sitting as a single judge, he had power to stay an order of the Full Court. His Honour rejected the contention that if such an application were to be made to a Full Court its consideration would be an exercise of appellate jurisdiction. That jurisdiction was, in his Honour's view, exhausted upon the disposition of the appeal. He concluded that a stay order could be made in relation to the orders of the Full Court and that the authority to do so resided in O 37, r 10 of the Federal Court Rules and s 23 of the Act. Spender J took a similar approach in Multicoin Amusements Pty Ltd v Avel Pty Ltd [1990] AIPC 36,118, although jurisdiction was not disputed in that case. I respectfully disagree with their Honours, although I accept that as a matter of convenience a single judge should be able to make orders of the kind sought, especially in the smaller capitals, Brisbane, Adelaide and Perth with a small number of resident judges. However, in my opinion, once the Full Court has made an order then absent some express statutory authority, only the Full Court or the High Court may stay its operation. This is consistent with the position which I adopted in Hempel v Moore (1987) 13 FCR 480 and referred to in Tuncak v Young (1987) 14 ALD 286. For these reasons, in my opinion, the motion cannot succeed. Nor can the directions made on 23 November be "set aside". Directions may be varied from one directions hearing to another. One judge, however, cannot in any meaningful sense "set aside" the orders of another.

27                                          In the same decision, French J accepted that the result sought by Manfal could be achieved by simply, in the exercise of the Court’s original jurisdiction, varying the programming orders so as to delay the progress of the application to trial pending institution of the special leave application in the High Court.  As his Honour observed, such an approach would not involve any interference with the orders of the Full Court.  Nor did it involve any ‘setting aside’ of earlier directions.  These observations by his Honour recognise a distinction between interfering with the orders of the Full Court or setting aside the orders of the Full Court on the one hand, with other forms of relief which would not have that effect.  The question is whether the forms for relief proposed by Mr Zentai would have the effect of interfering with or setting aside the earlier orders of the Full Court. 

28                                          It should, in any event, be noted in passing that Manfal would now be differently decided due to the amendment to the FCA by s 25(2)(d) providing that applications to stay an order of a Full Court must be heard and determined by a single judge unless a judge directs that the application be heard and determined by a Full Court or the application is made in a proceeding that has already been assigned to a Full Court and the Full Court considers it appropriate for it to hear and determine the application.  Of course that is an amendment peculiar to that situation and carrying with it statutory force. 

29                                          In this case, Mr Zentai filed an application under s 21 of the Act for a review of the s 19 Committal Order that he was eligible for extradition to Hungary in Zentai v Republic of Hungary [2009] FCA 284 per Gilmour J and in the Full Court decision per Black CJ, Tracey and Barker JJ.  That process, it is argued by the Commonwealth, is exhausted.  First, Gilmour J dismissed the application for review and confirmed the third respondent’s order made under s 19(9) of the Act.  The Full Court dismissed an appeal from the decision of Gilmour J and in the formal order of the Full Court said for the purposes of s 21(6)(g) of the Act Mr Zentai was eligible for surrender within the meaning of s 19(2) of the Act in relation to an extradition offence and that the order of the third respondent made pursuant to s 19(9) of the Act was confirmed. 

30                                          However, and in contrast to the issues in Zentai No 3, both Gilmour J and the Full Court held that it was no part of the function of a magistrate conducting a hearing under s 19 of the Act or a judge on review under s 21 of the Act to determine whether the crime the subject to the Extradition Request was an extradition offence or whether the subject person was an extraditable person (the Full Court decision (see [78])). 

31                                          The Commonwealth accepts that from a practical perspective there would be a loose end.  If only the s 22 Surrender Decision were set aside and the s 19 Committal Order was left untouched, then Mr Zentai would be committed to prison under s 19(9) of the Act.  However, the Commonwealth argues that Mr Zentai can remain on bail (see my decision in Zentai v O'Connor (2009) 263 ALR 511 (at [24]-[27)). 

32                                          Mr Zentai does not accept that there is an attack on the decision of the Full Court (or the decision of Gilmour J) nor that he should indefinitely remain on bail.  I agree.

33                                          Mr Zentai had previously sought orders quashing the warrant and accepts that there are complex conceptual and legal objections to the nullification of the warrant, particularly given the holding that it was not a nullity by reason of jurisdictional error (see Zentai No 3 (at [165])).  To the extent that the warrant may be amenable to a writ of certiorari, Mr Zentai argues that that relief must be an incidental consequence of other findings or holdings of the Court.  Senior counsel for Mr Zentai does not concede that the Court is incompetent to grant relief by way of certiorari concerning the warrant.  Nevertheless, Mr Zentai has abandoned pursuit of the writ of certiorari because a declaration in the form of Order 2A below would be sufficient to provide the protection that he seeks.  Mr Zentai argues that such a declaration would be appropriate and sufficient if it is effective in quelling the controversy agitated between the parties (Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 (at 596-597)). 

34                                          Mr MJ McCusker QC, senior counsel for Mr Zentai seeks a declaratory order in the following terms:

That upon a proper construction of section 22 of the Act, the offence in respect of which the Republic of Hungary seeks the extradition of the applicant in the Extradition Request of the Republic of Hungary dated 23 March 2005 is not an ‘extradition offence’ within the meaning of the Act and the applicant was, as a matter of fact, not capable of being found to be an ‘eligible person’ under s 19(2) of the Act. (Order 2A)

35                                          For Mr Zentai it is observed that if the Court grants a declaration that, in addition to not being an ‘extraditable person’, Mr Zentai is also not an ‘eligible person’ within the meaning of s 22(1) of the Act, it is inconceivable that any officer of the State or Commonwealth would act contrary to that declaration in future so as to give even putative effect to the warrant. 

36                                          Order 2A has two components, first, that Mr Zentai was never an extraditable person within the meaning of the Act.  This was a direct finding in Zentai No 3.  The second seeks to establish that he is not an ‘eligible person’ for the purposes of s 19 and s 22 of the Act.

37                                          The grant of such a declaration is consistent with the decision of the Court and reasons for judgment, particularly at [178] in Zentai No 3 where I said:

As Mr Zentai was, as a matter of fact, not ever capable of being found to be an ‘eligible person’ under s 19(2) of the Act, the Minister had no power to make a determination for his surrender for extradition under s 22 of the Act.

See also the findings at [166] and [177].

38                                          In open Court, senior counsel for Mr Zentai made it clear that Mr Zentai will not pursue any claim in compensation against the Commonwealth in respect of any such actions (other than his claim for costs).  The true purpose of seeking a declaration in terms of Order 2A was to ensure that no further action could be taken in execution of the orders made by the third respondent committing him to imprisonment pursuant to s 19(9) of the Act. 

39                                          Mr Zentai has made it clear that he is still prepared to accept that orders in the nature of certiorari are unnecessary provided there is declaratory relief in terms of Order 2A. 

40                                          Senior counsel for the Commonwealth raised an additional argument.  The contention advanced by Mr Williams QC was to the effect that, as s 3(a) of the Act makes it clear that the Act constitutes a code of the law relating to extradition providing:

3          Principal objects of Act

The principal objects of this Act are:

(a)        to codify the law relating to the extradition of persons from Australia to extradition countries and New Zealand and, in particular, to provide for proceedings by which courts may determine whether a person is to be, or is eligible to be, extradited, without determining the guilt or innocence of the person of an offence;

…

remedies which may flow for a contravention of the Act would, it is argued, therefore be confined to the remedies to be found within the four corners of the Act.  This would mean, for example, it is argued, that executive action under s 61 of the Constitution would not be available.  

41                                          Mr Zentai however does not rely on s 61 of the Constitution and presses his entitlement under ss 21, 22 and 23 FCA.

Conclusion on relief

42                                          The principal objection advanced for the Commonwealth is that the making of such an order would be an ‘attack’ on the Full Court decision confirming the third respondent’s s 19 determination of eligibility and the Committal Order. 

43                                          I am not persuaded that making a non-coercive declaration in the terms of the proposed Order 2A would be inconsistent with or precluded by the order of the Full Court. 

44                                          The Full Court itself made very clear in its reasons that its confirmation order was made in the confined judicial review provided for by s 21 of the Act.  The confined nature of that review has been commented upon by Toohey J in Director of Public Prosecutions (Cth) v Kainhofer (1995) 185 CLR 528 (at 541).  The decision made by the Full Court, in my view, was not determinative of the current issues such as whether Mr Zentai was accused of an extradition offence or whether such an offence existed.  Indeed, both Gilmour J and the Full Court expressly avoided consideration of those matters because they did not fall within the relatively narrow ambit of the s 21 review.  The Full Court, applying Kainhofer, held that it and Gilmour J were bound not to review the validity of the third respondent’s s 19 proceedings. 

45                                          More importantly, the Full Court expressly left open the issue of whether the Hungarian Extradition Request satisfied the requirement that there be an actual ‘extradition offence’.  At [76] the Full Court said:

We accept that the answer sought by the appellant to the substantive question concerning Art 2, para 5(a) of the Treaty is demonstrably an important one. We appreciate that, while in theory it may be possible for a person in the position of the appellant to make representations on such a question before a s 12 magistrate when an application for a provisional arrest warrant is considered, or with the Attorney-General before a notice is issued under s 16 of the Act, it will not always be the case that such questions are fully considered at that stage. We recognise, however, that it is open to a person in the position of the appellant to seek judicial review, at least of the decision of the Attorney-General to issue a notice under s 16, before a determination is made by a s 19 magistrate. We also consider that it may well be the case that, following a declaration under s 19(9), the question can again be raised before the Attorney-General before he or she makes a surrender decision under s 22 of the Act. Any decision of the Attorney-General under s 22 would also, on the face of it, be amenable to judicial review in the manner described above.

46                                          The Full Court was seized of the determination of the jurisdictional grounds raised pursuant to s 21 of the Act.  The present proceedings were advanced under s 39B of the Judiciary Act.  No determination made in this proceeding consistent with the proposed Order 2A would contradict the Full Court’s conclusion that it lacked jurisdiction to make the findings that have been made on this s 39B review. 

47                                          It does not appear to me that a declaration which is not a coercive order has any legal effect which would deprive the efficacy of the confirmation order made by the Full Court.  There is no challenge to that order made in these proceedings, nor would any order in accordance with the proposed Order 2A purport to constitute a challenge to the conclusion reached by the Full Court on the narrow ambit of its jurisdiction in the confirmation decision. 

48                                          I am mindful that, notwithstanding Mr Zentai’s success, it is appropriate that I make orders of the minimum nature to achieve justice between the parties.  But given the concern as to the possibility of the Committal Order simply hovering, the controversy between Mr Zentai and the respondents is not adequately quelled unless some declaratory order similar to the proposed Order 2A is made. 

49                                          I consider that the proposed Order 2A is appropriate and within power of the Court.

50                                          Finally in relation to mandamus, by my upholding ground 4, I held that ‘war crime’ was not an ‘extradition offence’ for the purposes of the Act by virtue of Art 2 para 5(a) of the Treaty such that it follows that Mr Zentai was not and cannot be eligible for surrender to the Republic of Hungary for that offence.  The Commonwealth says that Mr Zentai’s success on ground 4 must be accepted as being a ‘knockout blow’.  It follows that the first respondent must necessarily refuse the Extradition Request.  As a result, the Commonwealth accepts that the writ of mandamus sought in para 4.1 as proposed by Mr Zentai is appropriate.  The Commonwealth says para 4.2 is unnecessary as it must follow in any event but for completeness I propose to include it. 

Status quo

51                                          I have dealt with the second of the matters raised in [2] of these reasons first as it was the more substantial.  The remaining issue before dealing with costs is, in effect, whether Mr Zentai should remain on bail.  I cannot see why he should do so. 

52                                          The appropriate disposition of proceedings would normally require resolution of all matters outstanding in the controversy between the parties.  Rather than Mr Zentai being required to come back to the Court to seek a further form of relief if the Commonwealth does not proceed with an appeal, the approach should be the opposite.  All matters should now be resolved between the parties and should the Commonwealth pursue an appeal and should it see fit to do so, it would be open to the Commonwealth to approach the Court to seek to stay, pending the outcome of any appeal, of any of the orders which might otherwise be made resolving all matters between the parties.

COSTS

53                                          For the Commonwealth it is contended that as Mr Zentai succeeded on only three grounds of 13 (grounds 1-12 plus a new ground 5A), the Commonwealth should be required to pay only 50% of the costs of Mr Zentai.

54                                          Mr Zentai strongly opposes any reduction in the costs order that should be made and makes the following submissions. 

Mr Zentai’s submissions

55                                          Mr Zentai argues that the Court should exercise its discretion, to ensure as far as possible that the outcome accords with the justice of the case and a consideration of all the circumstances (Mok v Minister for Immigration, Local Government and Ethnic Affairs (No 2) (1993) 47 FCR 81 (at 89); Australian Prudential Regulation Authority v Holloway (2000) 35 ACSR 276 (at 288)).  It is therefore inappropriate to proceed by way of an arithmetic tally of the specific issues.  To take such an approach may be considered ‘simplistic’ (Henderson, Russell Fraser & Ors v Amadio Pty Ltd & Ors (No. 3) [1996] FCA 184 (at [33]) particularly where there are multiple issues and complex notions that clearly justify a global approach to costs (Ritz Hotel Ltd v Charles of the Ritz Ltd (1989) AI PC para 90-567 at 38,940-1).

56                                          Regarding other specific issues, a relevant consideration is whether any of these were unnecessarily pursued or involved extensive wasting of Court time and attention.  The question then is whether it was so unreasonable to pursue such a claim as to justify an order which would depart from the usual rule, that ‘costs follow the event’, and reduce Mr Zentai's costs (Rediffusion Simulation Ltd v Link-Miles Ltd [1993] FSR 369 (at 410)).

57                                          Mr Zentai argues that grounds 1, 2 and 3 should be treated as a single, related class and not treated as disaggregated, unrelated issues.  Regarding ground 4, he submits that the nature of Mr Zentai's objection based on the non-existence of the alleged ‘war crime’ was known to the Republic of Hungary, officers of the Commonwealth Director of Public Prosecutions (CDPP) and other relevant Commonwealth officers over a long period of time during which they resisted recognising the legal deficiency of the Extradition Request.

58                                          Regarding grounds 5, 5A and 6, Mr Zentai argues that the Court’s factual and interpretive findings vindicate to a large extent his claims that the first respondent may have made his decision affected by relevant misunderstandings.  These include the options available to him regarding alternatives to extradition, such as referral to Australian prosecution authorities, and misunderstanding the legal notion of ‘refraining’ from prosecution.  

59                                          Regarding ground 7 and ground 8, it was reasonable, Mr Zentai argues, to raise these objections concerning:

(a)        the uncertain nature of the Military Tribunal's procedures particularly whether, given the apparent incapacity of the Tribunal to comply with Art 8 of the European Convention on Human Rights (due to there being no living witnesses), the Military Tribunal would have to adopt ‘exceptional’ procedures, and

(b)        the question of whether Mr Zentai would be unduly ‘prejudiced’ by reason of the fact that the evidentiary foundation for the allegations against him may have been affected by prejudices held by the People's Court against members of the Royal Hungarian Army in 1947.

60                                          Mr Zentai says in the case of the Military Tribunal’s jurisdiction, despite multiple requests for information neither the CDPP nor the Hungarian authorities were prepared to provide relevant information concerning how the Military Tribunal would address the absence of living witnesses.  That justified Mr Zentai pursuing that aspect of that ground, having otherwise narrowed the scope of the ground by abandoning other elements of it.

61                                          Further, regarding the prejudice ground, Mr Zentai’s claim in part was based on the Full Court’s decision in Snedden v Republic of Croatia (2009) 178 FCR 546 but success of that ground was substantially diminished once the High Court delivered its position, on appeal, in Republic of Croatia v Snedden (2010) 84 ALJR 334, as senior counsel for Mr Zentai readily conceded in argument.

62                                          In any event, it is stressed that these two grounds occupied only a very small proportion of the overall case.

63                                          Conversely, Mr Zentai contends that his success on ground 9 was ‘substantial, weighty and significant’.  Although it did not have the effect that the Extradition Request was invalid ab initio, it would nevertheless have required the first respondent to reconsider the matter de novo and give proper, genuine and full consideration to its merits.

64                                          As to the remaining ground based on ‘Wednesbury unreasonableness’, while it may be difficult to succeed on the ground of manifest unreasonableness, Mr Zentai says he was justified in seeking to draw further inferences of cumulative administrative errors and irrational discrepancies concerning the decision-making process and how it was conducted.

65                                          As to the ground based on an implied requirement that the first respondent, in special circumstances, provide some explanation or reasons for his decision, Mr Zentai argues that until the High Court definitively upholds, qualifies or overturns Public Service Board (NSW) v Osmond (1986) 159 CLR 656, it is not unreasonable for a person seriously affected by the Commonwealth’s administrative decision to assert an implied right to reasons in specific circumstances, given the unclear state of authority on the issue.

66                                          Mr Zentai argues that by way of countervailing consideration, the Commonwealth raised a number of issues such as Mr Zentai's inability to pursue judicial review under s 39B of the Judiciary Act due to ‘delay’ and not having done so at the earlier s 16 and s 19 stages.  It also contended that the first respondent was effectively bound by the third respondent’s finding that Mr Zentai was an ‘eligible person’ so that that issue could not be raised by Mr Zentai.  The Court found these preliminary objections against the Commonwealth and in Mr Zentai's favour.

67                                          Whilst Mr Zentai may not have succeeded on each of the alternative grounds considered discretely, he argues that the overall conclusion of the Court (at [387]-[400], and particularly at [394]), emphasises how the Court’s findings on many of the individual matters canvassed in the various grounds cumulatively produced a determination by the first respondent, resulting from his failure to give proper and genuine consideration to the merits of the case and its many complex issues, that was unjust and oppressive.

68                                          Mr Zentai argues that the special humanitarian and human rights aspects should weigh heavily in favour of his receiving a full award of costs.  He argues that had some of the enquiries and claims on behalf of Mr Zentai been thoroughly addressed by the relevant authorities, Hungarian and Australian, at an earlier stage it may have been unnecessary for Mr Zentai to seek judicial review.  The matter was one going to the basic liberty of a longstanding Australian citizen.  A proper consideration by the first respondent might have also made it unnecessary for Mr Zentai to have spent a considerable amount of time in Hakea Prison at a time when he suffers serious ill-health and the effects of ageing.

69                                          Finally, it is asserted that the Court in exercising its discretion with respect to costs should take into account the public law aspects of the many issues raised (Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 (at 234-235)).  The Court’s decision, he asserts, has clarified for the public benefit, it is argued, a number of significant issues that were presented for the first time by the application.  

70                                          Mr Zentai had meagre resources at his disposal to pursue multiple complex claims in International Law, International Humanitarian Law, International Human Rights, Administrative and Constitutional Law, and without aid from any intervenor such as the Human Rights Commission.  Accordingly, the Court when exercising its costs discretion may have regard to the principle of ‘equality of arms’ in terms of his capacity to defend his claims against an experienced Commonwealth bureaucracy possessing a great store of knowledge of the relevant legislative provisions, precedents, authorities and instruments entailed in a complex extradition proceeding of this kind.

Consideration of costs arguments

71                                          As the parties accept, the Court has a general discretion under s 43(2) FCA to award costs, but the discretion must be exercised judicially: Australian Trade Commission v Disktravel [2000] FCA 62 (at [3]).  Ordinarily, absent a contrary statutory provision, costs follow the event and a successful litigant will receive his or her costs in the absence of special circumstances justifying some other order: Ritter v Godfrey (1920) 2 KB 47 as cited in Hughes v Western Australian Cricket Association (Inc) (986) ATPR 40-748 at 48,136.  This has been held to be the case even if the losing party had good legal grounds for its position and conducted itself in the litigation reasonably and appropriately: Ruddock v Vadarlis (No 2) (at 235); BHP Billiton Iron Ore Pty Ltd v National Competition Council (No 2) [2007] FCA 557 (at [27]).

72                                          Special circumstances may include where (BHP Billiton (at [27]) there were clearly distinct and severable issues or inquiries that were lost by the successful litigant (in which case it will be necessary to weigh up case management principles, the significance of the issue or inquiry in proportion to the proceeding as a whole, and whether the issue or inquiry had any strength or merit); or the conduct of the successful litigant in connection with the case was unreasonably inappropriate.

73                                          The usual starting point for a special circumstance order is Hughes (at 48,136), where Toohey J referred to the following principle from Forster v Farquhar (1893) 1 QB 564:

Where a litigant has 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.

At 48,136, Toohey J also referred to the following principle from Cretazzo v Lombardi (1975) 13 SASR 4 (at 12):

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.

74                                          However, in Disktravel, having cited Toohey J’s observations in Hughes,the Court warned against too ready a resort to apportionment according to issue based outcomes, citing the following observations of Jacobs J in Cretazzo (at 15):

The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case.  There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including, in particular, the severability of the issues, and no two cases are alike.  I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely upon his success in those particular issues.

75                                          In Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602, Goldberg J commented that (at [54]):

…a court should be reluctant to embrace the proposition that, as a general rule, it is appropriate to undertake an enquiry as to who was successful in relation to particular issues in a case to determine whether there should be an apportionment of costs against a successful party.  A court should not be too ready to disallow costs simply because a party has failed upon an issue, unless it be quite a separate and distinct issue from the issues in respect of which it succeeded or unless there be some element of unreasonableness or inappropriate conduct in relation to that issue.

76                                          In BHP Billiton (at [24]) Middleton J cited Hodgson CJ in Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd(unreported, Supreme Court of New South Wales, Hodgson CJ, 3 June 1998), where, after discussing the competing considerations of encouraging selectivity of issues and not penalising a party for supporting their case in every reasonable way, his Honour stated (at 13):

Apart from that consideration, in general terms I accept that if an issue is raised reasonably and is not disproportionate to the whole case, then normally the successful party should get his or her costs.  However, particularly in relation to severable issues, the lesser the strength of the point raised and the greater the proportion it bears to the whole case, the more likely it is that the successful party may be deprived of costs; and if the Court comes to the view that it was unreasonable to raise the issue, then the successful party may have to pay the costs of that issue.

77                                          On the other hand, in Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107, Finkelstein and Gordon JJ emphasised the importance of fairness in the exercise of the Court’s discretion observing (at [3]-[5]):

We think there is force in the argument that the appellant should not benefit from the usual rule that costs follow the event.  For many years the traditional rule has been that the winner (once the winner is properly identified) is entitled to recover his costs of the trial.  It sometimes happens that there is a departure from the traditional rule and the costs order takes account of the success of the parties on particular issues.  But to date the award of costs on an issue by issue basis has only been accepted in limited cases and then only when the circumstances are exceptional.

This approach is, if we may be permitted to say so, quite unfair.  Its effect is that a winner is entitled to all of his costs even if he raises a plethora of issues on which he is unsuccessful.  The unfairness of the traditional rule has been recognised in England where, following Lord Woolf’s interim report, Access to Justice (June, 1995) [at para 25.22], the Civil Procedure Rules were modified to require the judge to have regard to the circumstance (if it occurs) that the unsuccessful party has succeeded on some issues:  see r 44.3(4)(b).  In Western Australia, the Supreme Court Rules provide that costs should follow the event of each pleaded cause of action:  see r 66(2)(a).  This is narrower than the English approach but certainly more reasonable than adherence to the traditional rule. 

We do not believe there is any need to wait for a change in the Federal Court Rules to adopt an issue by issue approach here.  Costs are in the court’s discretion.  Fairness should dictate how that discretion is to be exercised.  So, if an issue by issue approach will produce a result that is fairer than the traditional rule, it should be applied.  It is not suggested that such an approach requires a precise arithmetical apportionment of the costs as between the winner and loser of discrete issues.  No doubt the assessment will often be rough and ready.  But it will have the virtues of both fairness and reasonableness, which are often lacking in the application of the traditional rule.

78                                          In Disktravel, the Full Court declined to apportion.  Of three grounds, the appellant did not succeed on the first, succeeded on the second, and although it was not strictly necessary for the Court to determine the point, did not succeed on the third issue.   The Full Court concluded (at [4]):

(a)        the appellant had succeeded completely in terms of the final orders it secured;

(b)        the issues it raised were not raised unreasonably;

(c)        the complex factual background had to be considered in relation to all issues; and

(d)        none of the issues raised could be characterised in terms of time and work involved as distinct and severable from the other issues.

79                                          In Emirates v Australian Competition and Consumer Commission (No 2) [2009] FCA 492, Middleton J held that it was not a case where fairness dictated that an issues approach to costs should be adopted.  He observed (at [11]):

A number of different arguments were advanced, more by way of legal analysis than factual analysis, which were reasonably canvassed by the respondents.  The canvassing of the issues said not to be successfully argued by the respondents did not involve appreciably extra court time or expense than would otherwise have been necessary to have properly considered the many arguments put by the applicants.  Any attempt to consider every issue (many of which overlapped) would involve ‘a nit-picking exercise which would obscure and ignore the ultimate result’.

80                                          Recently in Roadshow Films Pty Ltd v iiNet Limited (No 4) [2010] FCA 645, Cowdroy J considered decisions of the Federal and High Courts regarding the apportionment of costs and noted that ‘The current trend appears to favour apportionment in appropriate cases without such cases necessarily being classified as “exceptional”’ (at [37]).  His Honour concluded, however, that the respondent was entitled to raise any reasonable defences, and that it would, in fact, have been imprudent for it not to.  He continued ‘The need to conduct litigation economically does not have the consequence that a defendant should be dissuaded from raising defences upon which [it] might reasonably succeed’.  He concluded that the case represented one in which costs should follow the substantive result.

Conclusion in relation to costs

81                                          The actual hearing time of the substantive application was only two days.  In my view, a very large portion of that time would have been required to fully develop and fully respond only to those grounds on which Mr Zentai succeeded.  The factual and legal matrix was relevant to those three grounds. 

82                                          While the Court and the Commonwealth may have been put to additional time and effort to consider the remaining grounds, none of them could have been characterized as being unarguable.  Although the arguments of the Commonwealth were preferred on those grounds which were not upheld, in my view, the grounds were responsibly advanced and certainly at the hearing, economically argued. 

83                                          Had I been of a view that those arguments with which I did not find favour were obviously unarguable or irresponsibly advanced, I would most certainly have given serious consideration to the apportion of costs.  I cannot reach that conclusion. 

84                                          I take into account also that a person in Mr Zentai’s position would reasonably be expected to advance every proper argument which may result in the outcome for which he contends.  Some courts have taken the view that a person defending assertions who raises unsuccessful arguments should not be penalized in a circumstance where that person did not initiate the litigation.  In a broader sense, it may be said in relation to Mr Zentai that the extradition proceedings as a whole were originally initiated by the Commonwealth and Mr Zentai, in some respects, might be seen as defending his position. 

85                                          Those reasons alone are sufficient in my view to reach a conclusion that Mr Zentai’s costs entitlement should not be, in effect, discounted. 

86                                          Some of the other arguments advanced for Mr Zentai raised criticisms of the conduct of the Commonwealth or its officers.  I do not need to record all of those criticisms in light of my ruling on costs.  However, I do wish to make it clear that the conclusion that I have arrived at in these proceedings is reached on my perception as to application of the law to the facts as found.  It has not been my intention to expressly or implicitly raise criticism of any respondent or officer of the Commonwealth.  While it is not inappropriate for arguments for Mr Zentai to be advanced on that topic, I do not reach my conclusion in relation to costs as a result of any of those submissions.  From what has been apparent to me on the evidence and submissions, all parties and all representatives have acted with high professional standards in an unprecedented and challenging situation. 

CONCLUSION

87                                          The parties’ arguments as to the appropriate orders arise mainly on the basis that Mr Zentai succeeded on some grounds but not others.  Nevertheless he has persuaded me that the nature of the relief he seeks is within power and that granting it is an appropriate exercise of the Court’s discretion.  He has accepted that the orders sought should be stayed for a 21 day appeal period (although declaratory relief would not normally be stayed).  Otherwise I accept the submission for Mr Zentai that if the Commonwealth wishes the status quo concerning his bail to be preserved pending the outcome of an appeal, it is for the Commonwealth to apply for such relief.  Finally, in my view Mr Zentai is entitled to recover his costs on the usual basis without discount.

88                                          For those reasons, the following declarations and orders as to relief and costs are made:

1.         A writ of certiorari issue to quash the decision of the first respondent made on 12 November 2009 pursuant to section 22 of the Extradition Act 1988 (Cth) (the Act) determining that the applicant should be surrendered to the Republic of Hungary.

2.         A writ of certiorari issue to quash the warrant dated 12 November 2009 issued by the first respondent pursuant to section 23 of the Act authorising the applicant’s surrender to the Republic of Hungary.

2A.      It is declared that upon a proper construction of section 22 of the Act, the offence in respect of which the Republic of Hungary seeks the extradition of the applicant in the Extradition Request of the Republic of Hungary dated 23 March 2005 is not an ‘extradition offence’ within the meaning of the Act and the applicant was, as a matter of fact, not capable of being found to be an ‘eligible person’ under s 19(2) of the Act.

3.         Upon a proper construction of section 22 of the Act and Article 2(5)(a) of the Treaty on Extradition between Australia and the Republic of Hungary 1995 contained in the schedule to the Extradition (Republic of Hungary) Regulations 1997, it is declared that the offence in respect of which the Republic of Hungary seeks the extradition of the applicant in the Extradition Request of the Republic of Hungary dated 23 March 2005 is not an ‘extraditable offence’ within the meaning of the Act.

4.         A writ of mandamus issue to the first respondent directing him:

4.1       To determine that the applicant not be surrendered to the Republic of Hungary in response to the Extradition Request of the Republic of Hungary dated 23 March 2005 concerning the applicant; and

4.2       To order the release of the applicant.

5.         The further amended application be otherwise dismissed.

6.         The first respondent do pay the applicant’s costs of the proceeding including any reserved costs, to be taxed if not agreed.

7.         The orders set out in paragraphs 1 - 4 inclusive be stayed for a 21 day appeal period as prescribed by the Federal Court Rules pending the making of any further orders of the Court in any appeal filed by any of the respondents from these orders or declarations.

8.         During the 21 day appeal period referred to in paragraph 7 above, the orders of the Court made on 16 December 2009 whereby:

8.1       The warrant issued by the third respondent, a Magistrate of the State of Western Australia, dated 20 August 2008 pursuant to subsection 19(9) of the Act, committing the applicant to imprisonment in Hakea Prison, Canning Vale, Western Australia was stayed until further order of the Court;

8.2       The surrender warrant issued by the first respondent under section 23 of the Act authorising the fourth respondent, the Officer on Charge of Hakea Prison, Canning Vale, Western Australia, to release the applicant into the custody of officers of the Republic of Hungary was stayed until further order of the Court; and

8.3       The applicant was admitted to bail upon the conditions set out in Schedule 1 to the order,

shall remain in force.

9.         The orders contained in 7 - 8 above are made subject to any further orders of the Court in any appeal filed by any of the respondents from these orders or declarations.  

10.       There be liberty to any party to apply concerning the detail and structure of these orders and declarations. 

Associate:

Dated:         10 December 2010