FEDERAL COURT OF AUSTRALIA

DHP19 v Secretary of the Department of Health (No 2) [2019] FCA 1531

ORDERS

THE COURT ORDERS THAT:

1.    The costs of the interlocutory application are reserved.

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

REASONS FOR JUDGMENT

THAWLEY J:

1    On 4 September 2019 orders were made which included an order under s 15(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act), suspending the operation of a decision of the respondent until 7 days after the respondent made a decision on internal review: see DHP19 v Secretary of the Department of Health [2019] FCA 1451. At the conclusion of the hearing, both parties requested that costs be reserved. Orders were made for costs to be determined on the papers.

Applicant’s submissions

2    The applicant submitted that:

(1)    if the Court made no order as to costs of the applicant’s interlocutory application, then the applicant would obtain its costs by virtue of the operation of Rule 40.04 of the Federal Court Rules 2011 (Cth);

(2)    the Court should either make an order for costs in favour of the applicant or make no order as to costs, noting that Rule 40.04(a) would apply;

(3)    it was not appropriate to make an order that costs be costs in the cause, because events external to the proceedings (for example, success on internal review) might render the proceedings unnecessary, making it unfair that the applicant should pay the respondent’s costs in this Court.

Respondent’s submissions

3    The respondent submitted that:

(1)    Rule 40.04 only operates where no order for costs is made on an interlocutory application and does not create a default rule which operates where parties request the Court to make an order for costs;

(2)    the usual order for costs in the context of an interlocutory injunction granted to preserve the status quo pending final hearing is that costs be costs in the cause or, less frequently, that the costs be the applicant’s costs in the cause;

(3)    the appropriate order is an order that the costs of the interlocutory application be costs in the cause, consistently with the usual position, and because:

(a)    the applicant obtained relief only up until the end of internal review rather than until completion of any review by the Administrative Appeals Tribunal as had initially been sought;

(b)    the applicant was allowed additional time to formulate undertakings in support of its application, and the respondent incurred costs in responding to the proposed undertakings (some of which were not undertakings the Court could accept);

(c)    the respondent acted reasonably in defending the application, for example, not contesting that there was a prima facie case for interlocutory relief.

Consideration

4    Rule 40.04 only operates where no order for costs of an interlocutory application was made and, apart from informing the general statutory context, has no relevant operation where the Court is asked to make an order for those costs: Azaria Family Day Care Pty Ltd v Secretary, Department of Education and Training [2018] FCA 1640 at [56] (Wheelahan J). The applicant’s first submission must therefore be rejected.

5    The reasons why the usual order for costs in a matter involving the grant of an interlocutory injunction to preserve the status quo pending trial is an order for costs in the cause (or the applicant’s costs in the cause) were explained by Katzmann J in James v Commonwealth Bank of Australia (No 2) [2015] FCA 599 at [13] to [19]. The underlying rationale is that, whilst the court must be satisfied that the applicant has a case which is sufficiently arguable to warrant the grant of interlocutory relief, it does not adjudicate on the ultimate outcome; if the applicant is not ultimately successful in the proceedings, the applicant should not receive the costs of the application: Petar v The Macedonian Orthodox Community Church St Petka Inc (No 2) [2007] NSWCA 142.

6    However, every case turns on its own particular facts and, in the case of an order under s 15(1)(a) of the ADJR Act suspending the operation of an administrative decision, a part of the context is the particular statutory scheme on which the ADJR Act relief is operating, here the Therapeutic Goods Act 1989 (Cth) (TG Act). As explained in DHP19 at [18] to [21], the applicant has a right to internal review (which it is pursuing) and, if unsuccessful, a right to merits review by the Tribunal.

7    Order 2 made on 4 September 2019 was:

Pursuant to s 15(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), the operation of the respondent’s decision dated 29 July 2019 stated to come into effect from 29 August 2019 (the Decision) be suspended until 7 days after the respondent has made a decision, or is deemed to have made a decision, on the review to be requested (in accordance with Undertaking 2 below) by the applicant pursuant to s 60(2) of the Therapeutic Goods Act 1989 (Cth), or further order.

8    The applicant gave the following undertaking:

The applicant undertakes to request review under section 60 of the Therapeutic Goods Act 1989 (Cth) and to provide any further information in support of its request by 20 September 2019.

9    The appropriate course in light of Order 2 and the undertaking given is not to consider the question of costs of the interlocutory application until after internal review is complete, assuming it is requested as contemplated by the undertaking. Whilst it will depend on the precise circumstances at that time, it may then be appropriate to make a costs order. If internal review is successful, then that fact can be taken into account in determining the appropriate order. If internal review is not successful and the applicant proposes to seek review by the Tribunal, then that may be taken into account, for example, by making the order for costs of the interlocutory application abide by the outcome in the Tribunal. In the event that an application is to be made to the Tribunal it will also be appropriate to consider:

(1)    whether a further suspension should be granted only until such time as the Tribunal can decide whether it will grant a stay, if the applicant were to apply for one in the Tribunal; and

(2)    what should occur with these proceedings in light of s 10(2)(b)(ii) of the ADJR Act.

10    Although the applicant and respondent each sought a costs order in their written submissions, they indicated after making those submissions that they had no objection to the costs of the interlocutory application being reserved until after internal review is complete.

11    The costs of the interlocutory application are reserved.

Associate:

Dated:    18 September 2019