FEDERAL COURT OF AUSTRALIA

Marku v Republic of Albania (No 3) [2012] FCA 1183

THE COURT ORDERS THAT:

1.    The question of the costs of the trial of the separate question be reserved.

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

THE COURT ORDERS THAT:

1.    The question of the costs of the trial of the separate question be reserved.

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

REASONS FOR JUDGMENT

1    On 31 July 2012, in Marku v Republic of Albania [2012] FCA 804 (“Marku (No 1)”) I delivered answers to separate questions in proceeding VID 1241 of 2011 (“the common law proceeding”) and in proceeding VID 1242 of 2011 (“the appeal proceeding”). On 13 August 2012, I ordered that the separate questions be answered adversely to the applicant.

2    On 4 October 2012, I reserved the question of the costs of the trial of the separate questions in both proceedings for the reasons that follow.

3    The applicant, although unsuccessful in the litigation on the separate questions, resisted an order that he pay the respondent’s costs, in reliance on Cabal v United Mexican States (No 6) [2000] FCA 651 (“Cabal No 6”) where, following an unsuccessful application for bail by a person facing extradition, Goldberg J stated at [22]:

Although an order for costs is made to compensate a successful party for the expenses incurred in responding to an application or proceeding, that principle of compensation should yield in favour of the principle that a person detained by authority of the State should not be deterred by a potential costs order from seeking his or her liberty. There is a public interest in ensuring that persons detained against their will should not have any impediment put in their way which will inhibit them in seeking their liberty. In my view that public interest outweighs the general rule that a successful party is to be compensated for its costs by the unsuccessful party. In particular is this so where the costs are incurred by the State under whose authority the person is detained.

4    In Cabal v Secretary of the Department of Justice (Victoria) [2000] FCA 1227, North J applied Goldberg J’s approach where parties held in custody under the Extradition Act 1988 (Cth) (“the Act”) unsuccessfully sought relief in the nature of habeas corpus and related declarations.

5    In the present case, the respondent submitted that Goldberg J’s statement did not amount to a principle but was merely a consideration relevant to the exercise of the discretion. It contended that in this case, costs of the separate questions should, according to the general rule, follow the event.

6    As success in relation to the trial of a separate question does not constitute success in the proceeding, the award of costs on that basis involves, in effect, apportionment, which courts have hesitated to apply. The respondent relied on Baulderstone Hornibrook Pty Ltd v Qantas Airways Pty Ltd [2003] FCA 325 (“Baulderstone”), where Finkelstein J stated that while costs are ultimately discretionary, the general rule that they follow the event should, given the escalating costs of modern litigation, also apply to the determination of separate questions.

7    Finkelstein J did not, however, apply the general rule in Baulderstone, as the separate trial in that case was connected to the outstanding issues, possibly to such an extent that the ultimately successful party should be awarded the entire costs of the action (at [6]).

8    While in Cabal No 6, Goldberg J referred to a ‘principle’, subsequent Full Court authority makes clear that there is no special rule or principle (outside the criminal jurisdiction) that litigants who have unsuccessfully sought release from official detention should not be ordered to pay costs.

9    In Te v Minister for Immigration and Indigenous Affairs (2004) 204 ALR 497, a trial judge, apparently acting on the basis of the supposed principle, did not order a litigant who had unsuccessfully challenged a deportation order and immigration detention to pay costs.

10    The Full Court held that the trial judge had erred in treating the statement in Cabal No 6 as a principle. It referred, in that, context to Ruddock v Vadarlis (No 2) (2001) 115 FCR 229; 188 ALR 143 (“Vadarlis”). While rejecting any rule or principle, the Full Court acknowledged that the considerations in Cabal No 6 could be relevant to the exercise of the discretion. It observed that in the case before it, the authorities had presented very significant obstacles to the unsuccessful party’s case, a central claim of which was supported only by sparse evidence. Those outweighed the considerations in Cabal (No 6).

11    In Vadarlis, the Full Court considered costs in the context of public interest litigation. Black CJ and French J, in their joint judgment, referred to s 43 of the Federal Court of Australia Act 1976 (Cth), which provides:

43(1)    Subject to subsection (1A), the Court or a Judge has jurisdiction to award costs in all proceedings before the Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs shall not be awarded.

(1A)    [Concerns only representative proceedings]

(2)    Except as provided by any other Act, the award of costs is in the discretion of the Court or Judge.

12    Their Honours stated at [9]:

The power of the Court so conferred is not fettered by any stated legislative presumption about the manner of its exercise. That is consistent with the long standing authority of the House of Lords in Donald Campbell & Co Ltd v Pollak [1927] AC 732 that “the Court has an absolute and unfettered discretion to award or not to award [costs]”: per Viscount Cave LC; Viscount Dunedin, Lord Phillimore and Lord Carson agreeing (at 811). Like all discretions however it must be exercised judicially and not against the successful party except for some reason connected with the case.

13    Black CJ and French J cited Goldberg J’s statement in Cabal (No 6) which they described as a case in which the public interest converged with that of the individual. Their Honours referred to the writ of habeas corpus and the protection of personal liberty, but stated at [25]:

That is not to say, however, that a new rule is introduced to displace the ordinary rule in every case that concerns the liberty of the individual. The award of costs must remain an exercise of discretion having regard to all the circumstances of the case.

14    Black CJ and French J recognised that Vadarlis itself was a most unusual case. They stated at [29]:

This is a most unusual case. It involved matters of high public importance and raised questions concerning the liberty of individuals who were unable to take action on their own behalf to determine their rights. There was substantial public and, indeed, international controversy about the Commonwealth's actions. The proceedings provided a forum in which the legal authority of the Commonwealth to act as it did with respect to the rescued people was, and was seen to be, fully considered by the Court and ultimately, albeit by majority, found to exist. The case is quite different in character from the predominantly environmental litigation in which may of the previous decisions concerning the impact of public interest considerations on costs awards have been made. Having regard to its character and circumstances the appropriate disposition is that there be no order as to the costs of the appeal or the application before North J.

15    Their Honours (at [28]) identified in Vadarlis powerful factors militating against the application of “the usual rule” that costs follow the event, including the novel and important questions of law raised by the proceedings, as follows:

4.    The proceedings raised novel and important questions of law concerning the alleged deprivation of the liberty of the individual, the Executive power of the Commonwealth, the operation of the Migration Act and Australia's obligations under international law.

5    There was divided judicial opinion on these important issues, illustrating their difficulty.

6    The Commonwealth Parliament has subsequently passed laws purporting to exclude the rights of VCCL and Vadarlis or any other person to pursue the matter further, albeit special leave to appeal in the High Court was refused on other grounds going to utility and jurisdiction.

7.    The Commonwealth Parliament has also legislated to establish, as a proposition of statute law, in accordance with the view of the majority in the Full Court, that the Migration Act does not prevent the exercise of the Executive power of the Commonwealth to protect Australia's borders, including, where necessary, by ejecting persons who have crossed those borders.

8.    There was no financial gain to either VCCL or Vadarlis in bringing their claims.

9.    The legal representation for VCCL and Vadarlis was provided free of charge. The quality of the representation (on all sides) ensured that the proceedings, and the important questions to which they gave rise, were pursued and resolved with expedition and efficiency.

16    In McCrea v Minister for Customs and Justice (2005) 145 FCR 269, the appellant appealed from an order upholding his surrender to Singapore on charges of crimes punishable by death. He argued, inter alia, that Singapore had not given, as required, a valid and enforceable undertaking that the death sentence would not be carried out.

17    The Full Court dismissed the appeal. It also dismissed the Minister’s cross-appeal from the trial judge’s failure to order costs in the Minister’s favour. The Full Court found that the primary judge properly took into account the policy consideration in Cabal No 6, including that a person detained by the authority of the state should not be deterred by a potential costs order from seeking his liberty. The Full Court observed that the primary judge also concluded that the appellant’s argument had substance and deserved careful consideration, and that the nature of the case and the arguments made it appropriate to make no order as to costs (at [27] and [28]).

18    The Full Court concluded that the primary judge recognised that costs ordinarily followed the event and did not err in exercising his judicial discretion to depart from that general rule.

19    It is trite law that costs, while discretionary, generally follow the event. While Finkelstein J’s view in Baulderstone that the general rule should, in modern litigation, prima facie apply equally to the trial of separate questions, the exercise remains discretionary. In particular, the relationship of the separate question to the outstanding issues in the proceeding may be such that it would be premature to award costs on the basis of the outcome of the trial of the separate questions.

20    Further, while the considerations in Cabal (No 6) are not a rule or principle, they are potentially important factors relevant to the exercise of the discretion.

21    In this case, the applicant was already in custody serving a sentence for unrelated offences, and his case on the separate questions posed only an indirect and in, one sense, anticipatory, challenge to his detention. The separate questions were not, strictly speaking litigation analogous to habeas corpus. Nevertheless, as a matter of substance, they were principally directed at securing the applicant’s liberty when his current sentence expired. Further, the applicant had pro bono representation.

22    The applicant submitted that the separate questions involved difficult issues arising from the decision in Director of Public Prosecutions of the Commonwealth v Kainhofer (1995) 185 CLR 528 (“Kainhofer”). Further, the logic of aspects of Kainhofer was doubted by Gyles J in Tervonen v Finland [2008] FCA 781 and Flick J in Tervonen v Finland [2008] FCA 1133, and its reasoning had never been applied to a case of alleged mistaken identity.

23    While the separate questions involved difficult statutory analysis, the applicant was, from the outset, confronted by a High Court decision which appeared adverse on its face, and which was, irrespective of reservations expressed in lower courts, binding. The question was whether the statements and reasoning in Kainhofer applied to facts which differed from those in that case. The applicant, by refined arguments, sought to distinguish and confine the ratio of Kainhofer in order to exclude its statements and reasoning. The separate questions were focused on whether a dispute on identity could be determined under a particular section of the Act and were not, in my view, comparable to the “novel and important” questions raised in Vadarlis.

24    The separate questions were nevertheless clearly very significant to the appeal and common law proceedings as a whole. The applicant submitted that the separate questions had not disposed of the identity-related issues in either the appeal proceeding or, (subject to an amendment), the common law proceeding, and would otherwise have been determined in a single trial, in which he might ultimately succeed (by establishing that he is not Agostin Lleshaj or at least, that the s 19 magistrate erred in being satisfied that he was Lleshaj). Therefore, the Court should not, at this stage, order him to pay costs.

25    The applicant acknowledged that if the separate questions had been heard in the trial and he failed both on the statutory construction and in establishing that he was not Lleshaj, the Cabal No 6 considerations could not be invoked.

26    I considered that as some of the considerations in Cabal No 6 tended to support the applicant, albeit not compellingly at this stage, determination of the costs question would be premature. In the circumstances, particularly as a proposed amendment (if accepted) might permit determination of the identity question, and many contingencies remained outstanding in relation to the ultimate outcome of the litigation, it was appropriate to reserve the question whether the applicant should pay the respondent’s costs of the separate questions, at least while there remained a prospect of determining the identity question in the context of the appeal or common law proceeding.

Associate:

Dated:    26 October 2012