FEDERAL COURT OF AUSTRALIA

El-Debel v Secretary, Department of Immigration and Border Protection [2014] FCA 474

THE COURT ORDERS THAT:

1.    The applicant have leave to discontinue the whole of this proceeding.

2.    By 23 May 2014, the applicant file a Notice of Discontinuance giving effect to the leave granted by the Court in par 1 above.

3.    The respondents pay 40% of the applicant’s costs of and incidental to this proceeding as taxed or agreed.

4.    There be no other orders as to costs.

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

REASONS FOR JUDGMENT

1    This litigation has been substantially resolved by the actions of the parties. It has not been settled by agreement. Rather, as matters have turned out, the applicant no longer needs to press the claims for final relief which he made in his Originating Application. The applicant wishes to discontinue the whole of this proceeding but he wishes to do so upon the basis that the respondents should be ordered to pay a substantial part of his costs. The respondents consent to the discontinuance but argue that they should not have to pay any part of the applicant’s costs. They seek an order that the applicant pay a substantial part of their costs.

2    By these Reasons for Judgment, I determine all questions of costs. I will grant to the applicant leave to discontinue as sought.

The Relevant Background Facts

3    The applicant, Mr El-Debel, is a senior Commonwealth Public Servant employed in the Department of Immigration and Border Protection. He says that between 30 and 45 Departmental employees report to him at any given time.

4    In October 2013, one of the applicant’s subordinates alleged that, in early October 2013, the applicant had verbally abused her on two separate occasions. She complained that, on the second occasion, he had racially vilified her.

5    On 30 October 2013, a delegate of the first respondent suspended the applicant from his duties without pay for a period not exceeding 30 days. The reason given for the suspension was the alleged abuse of the applicant’s subordinate who had, by then, formally complained about the matter.

6    On 8 November 2013, the applicant sought review of the first respondent’s suspension decision made on 30 October 2013. The applicant’s application for review was made by his solicitors on his behalf. That application contained detailed submissions as to why the applicant should never have been suspended.

7    On 22 November 2013, the reviewer upheld the first suspension decision which the first respondent’s delegate had made on 30 October 2013.

8    On 29 November 2013, the first respondent, by the same delegate as had suspended the applicant in October 2013, again suspended the applicant without pay.

9    On 6 December 2013, the same delegate of the first respondent informed the applicant that she had decided to set aside her decision of 29 November 2013 and intended to make a fresh decision as to whether or not the applicant should be suspended from duty and, if so, whether that suspension should be with or without pay. In her letter of 6 December 2013, the delegate raised a number of additional allegations of misconduct against the applicant. These allegations were very serious and involved suggestions of sexual harassment.

10    On 12 December 2013, the applicant commenced the present proceeding. He joined the Secretary of the Department as the first respondent to this proceeding and the Commonwealth itself as the second respondent. In his Originating Application for Judicial Review, the applicant sought orders setting aside each of the suspension decisions made on 30 October 2013, 22 November 2013 and on 29 November 2013, on a number of grounds, including that he had been denied procedural fairness in relation to each of those decisions. He also challenged the threatened new process in relation to the additional allegations of misconduct raised in the delegate’s letter of 6 December 2013.

11    In addition to seeking administrative law remedies, the applicant made a claim under the Fair Work Act 2009 (Cth). He claimed that the second respondent had taken adverse action against him because he proposed to exercise his workplace rights and had thereby contravened s 340(1)(a)(iii) of the Fair Work Act.

12    When the applicant’s Originating Application was filed, it was allocated a return date of 20 December 2013. In fact, the matter did come before the Court on that day for the purpose of (amongst other things) addressing the Interlocutory Application which the applicant had included within his Originating Application. The interlocutory relief which the applicant sought was in the following terms:

1.     An order in the nature of an interim injunction pursuant to s545(2)(a) of the Fair Work Act 2009 or s 23 of the Federal Court Act 1976 that the Second Respondent be restrained from making any decision to suspend the Applicant from duties with or without remuneration on the basis of any allegations of misconduct against the Applicant existing as at the date of this Application.

2.     An order in the nature of an interim injunction pursuant to s 545(2)(a) of the Fair Work Act 2009 or s 23 of the Federal Court Act 1976 that the Second Respondent be restrained from investigating or relying on for any purpose the new allegations set out at items numbered 2, 3 and 4 of the letter to the Applicant from Ms Leo dated 6 December 2013.

3.     An order in the nature of an interim injunction pursuant to s.23 of the Federal Court Act 1976 that the First Respondent himself or through his delegates be restrained from suspending the Applicant from his employment.

4.     An order that this matter be listed for interlocutory hearing as soon as possible.

5.     An order pursuant to Rule 1.39 that the time for service of this Application be abridged.

13    As a result of discussions between the parties and further decisions made by the respondents, the applicant no longer needs to press any of the relief which he claimed in his Originating Application. As I have already mentioned, he now wishes to discontinue this proceeding. The respondents consent to the whole of this proceeding being discontinued. However, as I have also already mentioned, the parties are at odds on the question of costs.

The Competing Claims in Respect of Costs

14    The applicant seeks an order for costs in respect of the whole of that part of the proceeding which concerned the administrative law remedies which he claimed in his Originating Application. He recognises that, by reason of s 570 of the Fair Work Act, unless the Court is satisfied that one or more of the matters set out in s 570(2) are satisfied, the Court has no power to award costs against the respondents. The applicant accepts that, where a proceeding involves two broad claims (as is the case here), one of which is caught by s 570 of the Fair Work Act and the other of which is not, the Court should strive to give effect to both costs regimes (Construction, Forestry, Mining and Energy Union v Director of the Fair Work Building Industry Inspectorate (No 2) (2013) 209 FCR 464 at 484–485[60]–[67]). It is the applicant’s contention that there is no occasion in the present case for the Court to make an order for costs in respect of the Fair Work Act claim and that, in respect of that claim, there should be no order as to costs. Although the Fair Work Act claim relates solely to the 6 December 2013 letter sent by the first respondent’s delegate to the applicant’s lawyers, Counsel for the applicant did not strongly resist the proposition that I should regard the applicant’s costs as having been incurred as to 50% on his administrative law claims and as to 50% on his Fair Work claim. The respondents accepted that some apportionment is necessary. I will proceed upon the basis of a 50/50 split between the two broad claims.

15    The respondents also contend that the applicant should pay the respondents’ costs of his administrative law claims in respect of the period from and including 20 December 2013 (but not before) and should also pay the respondents’ costs of his application for interlocutory relief contained in his Originating Application. The respondents argue that there should be no other orders as to costs by which I take them to mean that, subject to their claim for costs in respect of the applicant’s interlocutory application, they accept that there should be no costs ordered in respect of the applicant’s Fair Work Claim. They also intend, I think, to contend that there should also be no orders as to costs in respect of the applicant’s administrative law claims for the period up to 20 December 2013.

16    Both parties tendered evidence directed to the question of costs and made detailed submissions in respect of costs both in writing and orally. Inevitably, both sides of the record travelled to some extent down the path of endeavouring to justify the case that each of them would have propounded had the matter gone to a hearing.

The Relevant Principles

17    Under r 26.12(7) of the Federal Court Rules 2011 (FCR), unless the terms of a consent order or an order of the Court provide otherwise, a party who files a Notice of Discontinuance under r 26.12(2) of the FCR is liable to pay the costs of each other party to the proceeding in relation to the claim, or part of the claim that is discontinued. In the present case, of course, the applicant has not yet filed a Notice of Discontinuance. For that reason, r 26.12(7) has not been engaged. However, r 26.12(7) reflects a more general policy of the law to the effect that a party should always be permitted to discontinue its proceedings but, in the modern setting, should usually have to pay the costs of the other parties occasioned by the bringing of the proceedings and their subsequent abandonment. This is not to gainsay the broad discretion in respect of costs given to the Court by s 43 of the Federal Court of Australia Act 1976 (Cth). Nonetheless, the Court should give effect to this general policy when making costs orders unless there is some good reason for declining to do so.

18    As the Full Court said in Rickus v Motor Trades Association of Australia Superannuation Fund Pty Ltd (2010) 265 ALR 112 at 136–137 [117]–[119]:

In Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 (Ex parte Lai Qin), McHugh J discussed some general principles applicable to the award of costs in Australian courts. At 624, his Honour said that, after a hearing on the merits, as a general rule, the successful party is entitled to his or her costs. It is success in the action that usually controls the exercise of the court’s discretion in respect of costs. At 624–625, his Honour also said:

In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties (Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201). To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action (Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201). In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd [1971] QWN 133, the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans.

Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in South East Queensland Electricity Board v Australian Telecommunications Commission (Unreported, Federal Court of Australia, 10 February 1989) where his Honour ordered the respondent to pay 80% of the applicant's taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare.

If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases (footnotes omitted).

In Mineralogy Pty Ltd v National Native Title Tribunal [1998] FCA 1700, the Full Court accepted that, when this Court is considering the question of costs in relation to an application for leave to discontinue proceedings pursuant to O 22 r 2(1)(d) of the Federal Court Rules, the appropriate test to apply is that which was explained by McHugh J in Ex parte Lai Qin 186 CLR 622 at 625. The Full Court held that, in most cases where there has been no trial on the merits, it is not appropriate in determining an issue of costs to make a prediction as to the outcome of the hypothetical case. That approach was followed by Rares J in Clark v ING Life Limited [2007] FCA 1960 at [16]. See also O’Neill v Mann [2000] FCA 1680 at [11]–[13] (per Finn J) and J H Lever & Co Pty Ltd v Maniotis (2005) 215 ALR 773 at [3] (per Mansfield J).

In our judgment, the question of costs thrown up by the grant of leave to the Trustee to discontinue the Trustee’s proceedings and the subsequent discontinuance of those proceedings was one which had to be determined in light of that discontinuance and having regard to the circumstances in play at the time that that discontinuance was put into effect. As at 28 July 2008, there had been no hearing of the appellant’s Cross-Claim and no determination on the merits of the issues raised in that Cross-Claim. If the question of costs occasioned by the discontinuance of the Trustee’s proceedings had been determined at that time, that question would have been considered in circumstances where there had been no hearing on the merits of the claims made by the Trustee in its proceedings and would have fallen squarely within the principles enunciated by McHugh J in Ex parte Lai Qin 186 CLR 622. In a case such as the present, it would have been inappropriate for a judge to enter into a detailed examination of all relevant facts and circumstances in order to determine whether or not the bringing and maintaining of the Trustee’s proceedings up to 28 July 2008 had been reasonable.

19    Both parties relied upon the observations made by McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at 624–625 which were quoted by the Full Court in Rickus.

Consideration

20    At all relevant times, the applicant argued that the three suspensions which he challenged in this proceeding were clearly flawed not the least because, in respect of each of them, he had been denied procedural fairness. He submitted that, had the matter gone to a final hearing, there is no doubt that he would have succeeded in having each of those decisions set aside. He then submitted that this case was squarely within the exceptional class of case referred to by McHugh J in Lai Qin at 624–625.

21    The respondents accept that they should not have their costs of the proceeding in respect of the period up to and including 19 December 2013. Nonetheless, they argue that the applicant ought not have his costs either in respect of that period.

22    Both sides of the record tendered evidence as to the communications which passed between them in the period from October 2013 up to and including 19 December 2013.

23    I do not think that it is necessary to traverse the detail of those communications. It is sufficient for present purposes for me to say that, although the respondents endeavoured to answer the claims being advanced by the solicitors for the applicant in that period, they failed to address all of those claims in a satisfactory manner prior to the commencement of the proceeding and thereafter in the period up to and including 19 December 2013. In my judgment, the applicant was justified in commencing the present proceeding and did not act unreasonably in doing so. He was also justified in continuing to press for the final relief which he claimed throughout the period up to and including 19 December 2013.

24    The evidence demonstrates that, late in the day on 19 December 2013, and during the course of that evening, the parties reached a sensible temporary accommodation which made pursuit of the applicant’s interlocutory application unnecessary. Nonetheless, the respondents now argue that the applicant’s interlocutory application was bound to fail because the relief sought by that application was expressed too widely and was not satisfactorily anchored in the applicant’s claims for final relief.

25    In very broad terms, the respondents submit that the applicant maintained the present proceeding after 20 December 2013 unnecessarily. They submit that the applicant should have sought leave to discontinue immediately after 20 December 2013.

26    The parties informed me on 20 December 2013 that, in effect, all suspension decisions made by the respondents in respect of the applicant would be regarded as of no effect and that the investigative process into all allegations against the applicant would be restarted with a fresh delegate of the first respondent. It was in light of that circumstance that the parties agreed to adjourn the proceeding for further directions to 7 February 2014. This had not been the respondents’ position prior to 19 December 2013. For some reason, they had been prepared to abandon the second and third suspension decisions but not the first.

27    On 7 February 2014, the applicant raised a number of fresh complaints concerning events which had occurred subsequent to 20 December 2013. It is not necessary now for me to describe these fresh complaints. They arose from a decision on the part of the respondents to direct the applicant not to attend his usual place of work but rather to work from home.

28    On 6 March 2014, I was informed that the applicant saw no point in continuing with the proceeding as, in substance, he had obtained all of the relief which he had been claiming. I was told that the applicant wished to discontinue the whole of the proceeding but that there was an argument about costs.

29    As I see matters, this is no ordinary case of an applicant abandoning a proceeding and giving up his claims for relief. If it were such a case, I would think that the appropriate order in respect of costs would be that the applicant pay the respondents’ costs, or at least a substantial part of them. The brief discursus which I have set out above demonstrates, in my view, that the applicant was justified in commencing the present proceeding and in pursuing it thereafter until he was satisfied that he had obtained all of the relief that he could reasonably seek to obtain. I do not think that the applicant maintained the proceeding at any time unreasonably or unnecessarily.

30    Notwithstanding these general observations, there is some force in the submission made on behalf of the respondents to the effect that the Court would never have granted interlocutory relief in the terms sought by the applicant in his Originating Application. The relief which he claimed went beyond the terms of the final relief which he sought and would not have been granted in the terms in which he sought it. Nonetheless, it is likely that some appropriate interlocutory relief would have been granted. The respondents are entitled to some discount for these factors but only a small one.

31    I propose to grant leave to the applicant to discontinue the whole of the present proceeding and to do so upon the basis that he should obtain some compensation for his costs outlays.

32    In light of the views that I have expressed above and taking into account all of the factors which I have mentioned, I think that the appropriate orders in respect of costs are that:

(1)    The applicant should have 80% of the costs of his claims for administrative law relief. That is to say, the applicant should have 80% of 50% of his overall costs. This is 40% of his costs overall.

(2)    There should be no order as to the costs of the Fair Work Act claim made by the applicant.

(3)    The respondents are not entitled to any costs as against the applicant.

33    There will be orders accordingly.

Associate:

Dated:    13 May 2014