Federal Court of Australia

Shuvo v Minister for Immigration and Multicultural Affairs [2026] FCA 1247

ORDERS

THE COURT ORDERS THAT:

1.    The appellant be granted leave to discontinue the appeal commenced by way of Notice of appeal filed on 6 February 2025.

2.    There be no order as to the costs of and incidental to the proceedings.

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

REASONS FOR JUDGMENT

SHARIFF J:

1.    INTRODUCTION

1    The sole issue that requires determination in these proceedings is whether the appellant should pay the costs of the first respondent (Minister). I have determined that there should be no order as to costs.

2    The short background is that the proceedings involved an appeal from the orders and decision of the primary judge in Shuvo v Minister for Immigration and Multicultural Affairs [2025] FedCFamC2G 2 (Kaur-Bains J). The appeal was listed for hearing before me on 28 August 2026. The appeal did not proceed. That is because on 25 August 2026, the appellant sent an email to the Registry indicating that he wished to discontinue the proceedings on account of his circumstances and concerns regarding an inability to fund his own costs or pay any other costs, including those of the Minister. The appellant’s email relevantly stated:

I have been experiencing significant financial hardship and have limited capacity to meet further legal or court-related expenses. I have already faced substantial financial pressure arising from the proceedings and associated legal expenses. I have also been relying on limited support from others, and my parents are retired. In addition, due to my father’s current serious health circumstances, I am extremely hesitant to seek further medical assistance from my family.

In these circumstances, I respectfully ask that consideration be given to my financial hardship when dealing with any issue of costs arising from the discontinuance of this appeal.

3    As the hearing of the appeal was impending, the Registry (at my request) enquired of the Minister’s solicitor whether the hearing of the appeal should be vacated, and leave be granted to the appellant to discontinue the appeal with no order as to costs.

4    On 26 August 2026, the Minister communicated that his position was that under r 36.73(4) of the Federal Court Rules 2011 (Cth) (Rules), leave to discontinue the appeal should be granted on the basis that the appellant pay the Minister’s costs. The Minister filed short submissions and evidence in support of his position.

5    Despite the submissions made by the Minister, I am not satisfied that the appellant should pay the Minister’s costs for the reasons that follow.

2.    CONSIDERATION

6    The ordinary position under r 36.73(4) of the Rules is that an appellant who files a notice of discontinuance in respect of an appeal must, unless the parties otherwise agree, pay the costs of each respondent, which reflects the usual course that costs are awarded in favour of the successful party. The full text of r 36.73 provides as follows:

Discontinuance of appeal

(1)     An appellant may discontinue an appeal by filing a notice of discontinuance of the appeal, in accordance with Form 126:

(a)     without the Court's leave - at any time before the hearing of the appeal; or

(b)     with the Court's leave:

(i)     at the hearing; or

(ii)     after the hearing and before the judgment is pronounced or the order is made.

(2)     A notice of discontinuance has the effect of an order of the Court dismissing the appellant's appeal.

(3)     A notice of discontinuance filed by one appellant does not affect any other appellant in the appeal.

(4)     An appellant who files a notice under subrule (1) must, unless the parties otherwise agree, pay the costs of each respondent.

7    It is r 36.73(1)(a) that is engaged in the present case, given that the appellant sought to discontinue the proceedings before the hearing of the appeal. It was open to the appellant to file a notice of discontinuance without the Court’s leave, but he sought such leave given that he sought a departure from the operation of r 36.73(4).

8    The Minister submitted that the position contained in r 36.73(4) reflected the ordinary position as to costs, and that the appellant had not demonstrated why the Court should depart from that position or why this was an “exceptional case”: citing Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; 234 CLR 52 at [25]–[26] (Gleeson CJ, Gummow, Kirby, Hayne and Crennan JJ). The Minister further submitted that it had “long been the position of [the] Court that financial hardship is not a reason for the Court to make an order relieving a party of the costs burden that is imposed by the filing of a notice of discontinuance”: citing Lababidi v Secretary, Department of Employment and Workplace Relations [2007] FCA 1568 at [6] (Kenny J) cited by Lee J in Arafat v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCA 1432 at [14]-[16] (noting that Lee J’s reasons for not ordering costs identified “exceptional” circumstances). The Minister submitted that, whilst the fact that the appellant has limited or no financial capacity to meet a costs liability “may be of very great importance to any decision to recover costs by the respondent”, it does not have any effect in altering the operation of the Rules: citing Akbar v Minister for Immigration and Multicultural Affairs [2002] FCA 209 at [5] (Spender, Nicholson and North JJ agreeing).

9    I do not accept the Minister’s submissions in a number of respects. In particular, I do not accept that “exceptional” circumstances must be demonstrated in order for the Court to make an order that there should be no order as to costs arising from an appellant discontinuing an appeal before it is heard. Rule 36.73(4) reflects an ordinary or default position as to costs, but nothing in that rule derogates from the Court’s broad discretion to either dispense with compliance with the Rules (r 1.34) or to make an order for costs under s 43 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) (taking into account that the overarching purpose of civil practice and procedure in the Court is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible under s 37M(1) of the FCA Act).

10    Rule 36.73(4) is not one of absolute application: see Arafat at [14]. Whilst Lee J considered that the facts in Arafat were “exceptional” (at [15]-[16]), it does not follow that exceptional circumstances need to be shown for the Court to exercise its discretion to depart from r 36.73(4). Arafat involved an appeal that proceeded to hearing and was discontinued during that hearing. Where an appeal is discontinued before the hearing of the appeal, different considerations may be brought to account in the exercise of the Court’s broad discretion.

11    Subject to the broad discretionary nature of the power to award costs, a common position has developed that a court does not ordinarily make an order for costs in circumstances where there has been no hearing on the merits. That position derives (at least) from McHugh J’s reasons in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; 186 CLR 622 at 624–625. There are, of course, exceptions to this general position: see Capic v Ford Motor Company of Australia Ltd (Costs Forthwith) [2019] FCA 1065 at [10] (Perram J). The Court may make an order for costs in favour of a party notwithstanding that there has been no hearing on the merits in circumstances where:

(a)    one party has had a substantial victory and the other a substantial loss: FCA US LLC v Mahindra Automotive Australia Pty Ltd [2021] FCA 1091 at [33] (Halley J);

(b)    one party was almost certain to have succeeded: Capic at [10];

(c)    one party has acted so unreasonably that the other party should be awarded costs: Capic at [10]; or

(d)    the Court is satisfied that one party has effectively surrendered or capitulated: Mahindra at [35].

12    Rule 36.73(1)(a) provides that an appellant may discontinue an appeal before it is heard but r 36.73(4) contemplates that notwithstanding the absence of a hearing of the appeal, the ordinary position is that the appellant should nevertheless pay each respondent’s costs. The rule may have had in mind that even if there is no hearing of the appeal, each respondent may have nevertheless been put to the cost of defending the appeal up to that point in time. However, nothing in the operation of the Rules in this way limits the appropriate order the Court may make as to costs where there has been no hearing of the appeal or a determination of the appeal on the merits. This point was made by Bromberg J in Cetinkaya v Official Trustee in Bankruptcy [2012] FCA 611 at [16]-[24]. His Honour stated at [16]-[18]:

[16]     The Rules contain a specific rule dealing with the discontinuance of an appeal. Rule 36.73 permits an appellant to discontinue an appeal by filing a notice of discontinuance. That may be done without the Court’s leave at any time before the hearing of the appeal or, with the Court’s leave, at the hearing or after the hearing and before judgment is pronounced. Rule 36.73(4) provides:

An appellant who files a notice under subrule (1) must, unless the parties otherwise agree, pay the costs of each respondent.

[17]    Unlike r 26.12(7), which provides for a capacity for the Court to otherwise order, r 36.73(4) contains no such facility. However, I do not consider that r 36.73(4) was intended to foreclose the exercise of the Court’s discretion as to costs, where the leave of the Court to discontinue an appeal is required. In relation to the predecessor provision to r 36.73(4) Lee, Tamberlin and RD Nicholson JJ in Mineralogy Pty Ltd v National Native Title Tribunal [1998] FCA 1700 at 7, reasoned that where an appellant sought leave to discontinue an appeal, the question of Costs fell to be considered in accordance with the Court’s discretion. In Christodoulou v Disney Enterprises Inc [2006] FCA 902 at [4], Heerey J similarly observed in relation to the predecessor provision to r 36.73(4), that the Court nevertheless has a broad discretion conferred by s 43 of the Federal Court Act to make some other order as to costs.

[18]     There are well established principles developed by the authorities to guide the Court in the exercise of its discretion to award costs in the event where there has been no hearing on the merits and a proceeding is discontinued.

13    Bromberg J then at [19] set out McHugh J’s reasons from Lai Qin at 624-625 and then reasoned as follows at [20]-[24]:

[20]     In the context of the discontinuance of an appeal, the Full Court in Mineralogy accepted the test enunciated by McHugh J as the appropriate test to apply. That test has been frequently applied in relation to the discontinuance of a proceeding. The relevant authorities are helpfully collected by Greenwood J in Akiba v Queensland (2010) 184 FCR 406 at [83]–[96] and also by Kenny J in Ann Street Mezzanine Pty Ltd v KPMG [2011] FCA 453 at [24]–[29]. The many authorities there considered may be supplemented by the Full Court’s judgment in Rickus v Motor Trades Assn of Australia Superannuation Fund Pty Ltd (2010) 265 ALR 112 at [118].

[21]    The guiding principles are firm in their resolve that where parties wish to end the litigation, the Court will facilitate that course. The Court will not conduct a hypothetical trial to assess the merits of the substantive application before it, for the purpose of determining who should bear the costs. Commonly, a discontinuance will result in no order as to costs so that each party will bear its own costs. Whilst it has been suggested that “special circumstances” may be required to be demonstrated to avoid such a result, the better view is that the imposition of that qualification would be an overly strict approach.

[22]     Where the further prosecution of a proceeding has become futile, there are two well recognised reasons for the making of adverse costs orders, each of which is referred to by McHugh J in Lai Qin.

[23]     The first is where the judge is confident that one party was “almost certain” to have succeeded. A discontinuance amounting to an effective surrender by the applicant provides an obvious example of where an adverse costs order against an applicant will be made. But as McHugh J emphasised, reaching the requisite level of confidence as to the apparent certainty that one party will have won, is “likely to be rare”.

[24]     The second category relates to cases where one of the parties has acted “so unreasonably” that the other party should obtain the costs of the action. The unreasonableness of the conduct of a party may be examined by reference to the commencement of, and the conduct of, the proceeding.

14    I agree with Bromberg J’s reasons. They accord with the reasons of the Full Court in Mineralogy Pty Ltd v National Native Title Tribunal [1998] FCA 1700 (Lee, Tamberlin, and R D Nicholson JJ). Accordingly, I reject the Minister’s submissions that exceptional circumstances must be shown for there to be no order as to costs or to depart from r 36.73(4) of the Rules.

15    I accept (as the Minister submitted) that, as Kenny J stated in Lababidi at [6] (and which Lee J also recognised in Arafat at [14]), there are numerous decisions in this Court to the effect that financial hardship or claimed incapacity does not justify an order relieving a party of a costs burden that would ordinarily be imposed. However, any order as to costs involves an exercise of discretion that must be exercised judicially. Every case must be assessed on its own facts.

16    In the present case, the Minister relied on evidence that costs in the amount of approximately $7,500 (excluding GST) had been incurred and sought an order that costs be fixed in the amount of $5,625 on a party/party basis as reflecting the amount that it would be expected that the Minister would ordinarily be able to recover. The costs incurred included those:

(a)    in reviewing and considering the notice of appeal and the provision of advice to the Minister;

(b)    preparing for and attending a directions hearing before me on 24 June 2026 and thereafter providing a proposed timetable;

(c)    preparing the appeal book that was filed on 3 July 2026;

(d)    drafting submissions that were filed and preparing a list of authorities that were not filed;

(e)    in relation to the discontinuance, including corresponding with the appellant and the Court, and advising the Minister; and

(f)    drafting and finalising the submissions and evidence in support of the Minister’s position on the question of costs.

17    I accept that the Minister was put to the cost of responding to the appeal, appearing at a case management hearing, preparing short minutes of order, preparing an appeal book (which I ordered to be filed by no later than 3 July 2026) and preparing his submissions (which I ordered to be filed by no later than 10 July 2026, before the filing of submissions by the appellant). However, the appellant had filed no submissions in support of his appeal and by seeking to discontinue the appeal had brought about the position that neither the Minister nor the Court had to expend any further time or cost on the determination of his appeal. Despite this, the Minister thereafter incurred costs in considering his position, seeking and obtaining advice in relation to the question of costs, and then preparing submissions and evidence in order to agitate the question of costs. Those costs were incurred knowing that they might be irrecoverable.

18    There is force in the Minister’s submission that costs have been incurred in defending the appeal and that the appellant’s impecuniosity should not stand in the way of the Minister being compensated for those costs that have, in effect, been wasted. One difficulty with the Minister’s contention is that I do not know whether those costs would have been the subject of a favourable costs order because I do not know whether the Minister would have succeeded in the appeal. Based on the information provided by the appellant to the Registry, the appellant did not seek to discontinue his appeal because he believed it to be unmeritorious, but because of his impecuniosity. It is not a case where the Minister submitted, or the appellant conceded, that the discontinuance was an effective capitulation. The point here is not that the appellant’s impecuniosity is, of itself, a reason not to order costs. Rather, the point is that by reason of his impecuniosity, the appellant decided not to prosecute his appeal, with the result being that the Court is not being called on to determine the merits of the appeal. It means I cannot make, and was not invited to make, an assessment as to whether the Minister would have succeeded. As a result, I do not know whether the Minister’s costs were likely to be the subject of a favourable costs order, let alone recoverable.

19    In Arafat, the relevant discontinuance came about in circumstances where Lee J regarded the appellants’ prospects of success in the appeal to be low and invited the appellants to discontinue it. There were also other circumstances, including that the appellants had already returned to Bangladesh. What is relevant is that his Honour exercised a broad judicial discretion not to award costs in favour of the Minister, notwithstanding his Honour’s recognition that the Minister had incurred costs and that the appellants’ prospects of success in the appeal were low. I refer to Arafat in this way not because it stands as a precedent, but because it highlights the essentially discretionary nature of the exercise of the Court’s power. The adjectival description of the circumstances in Arafat as “exceptional” was not a statement of principle but reflective of what moved his Honour in that case to exercise the discretion in a particular way.

20    In light of all the circumstances, in the present case, I am satisfied there should be a departure from r 36.73(4) of the Rules. In the exercise of my discretion, I will grant leave to the appellant to discontinue the appeal and make no order as to costs.

Associate:

Dated:    17 September 2026