Case: Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] HCA 6 ; (1997) 186 CLR 622
Outcome: considered
9 March 2009, the applicant's solicitors wrote to the Minister's solicitors in the following terms: We refer to the above proceedings in respect of which we have recently accepted instructions to act for Mr Pull. We confirm that we will shortly be filing a Notice of Appearance in the proceedings. We are instructed to put you on notice that Mr Pull intends to challenge the constitutional validity of Item 7 of Schedule 4 to the Migration Legislation Amendment Act (No. 1) 2008 ( the amending statute ). Mr Pull will also contend that the invalidity of Item 7 renders invalid the visa cancellation decision of 2 June 2005 ( the decision ) made by the delegate of the Minister for Immigration &amp; Citizenship ( the Minister ). Mr Pull has been detained as a result of the change in his legal status flowing from the decision. It is therefore reasonable for him to bring these proceedings to have the decision quashed. If Mr Pull is forced to move forward with these proceedings, considerable time and effort will be incurred in, inter alia, the preparation of pleadings, submissions and notices pursuant to s78B of the Judiciary Act 2003 (Cth). The validity of the decision is the subject matter of these proceedings. We therefore ask that, in the event that the Minister intends to move away from the decision whether through revocation or the consideration of a new cancellation decision or otherwise you notify us of this intention within 7 days of the date of this letter. In order that you may better understand Mr Pull's position, we will provide you with pleadings that state the intended grounds of review in advance of the directions hearing on Wednesday 11 March 2009. We invite the Minister to revoke the decision and release Mr Pull from detention. In the event that we do not receive such a notification and the Minister later reconsiders the decision, our client intends to rely on this letter on the question of costs under the principles stated in Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] HCA 6 ; (1997) 186 CLR 622. On 27 March 2009, the applicant's solicitors sent an email letter to the Minister's solicitors in the following terms: Basis of Mr Pull's detention We note your email confirming that Mr Pull was originally detained under section 189(1) of the Migration Act 1958 (Cth), and is now detained under section 196 of the Act. Given this confirmation, we require no further documents regarding his legal status at this time. Costs letter Also, we note that we have not received any response to our letter dated Friday 9 March 2009 (Our Letter). We understand that you received Our Letter on Monday 12 March 2009. As noted in Court on Wednesday 14 March 2009, Mr Pull still puts his case for release from detention on the basis of the constitutional invalidity of the Migration Legislation Amendment Act (No. 1) 2008 . We have therefore proceeded in the preparation of our case on the basis that the Minister for Immigration and Citizenship ( Minister ) intends to defend fully the validity of Mr Pull's detention. In the event that there is any dispute about costs, we will rely on this correspondence. On 31 March 2009, the Minister's solicitors responded as follows: In response to your letter dated 9 March 2009 the respondent does not concede that Item 7 of Schedule 4 to the Migration Legislation Amendment Act (No. 1) 2008 is invalid. As, in our client's view, the original decision made on 2 June 2005 to cancel your client's visa remains operative and authorises your client's continuing detention, the question of revocation or a need to make a further decision to cancel, as suggested at paragraph 4 of your letter, does not arise. We look forward to receiving your client's Amended Application. On the costs issue, the applicant referred the Court to the following principles in a case of discontinuance for futility and their application in the present case: (1) When a party, for its own reasons, discontinues a proceeding with leave pursuant to O 22 r 2(1)(d) of the Rules, the respondent is not automatically entitled to have the applicant pay his or her costs. Rather, costs are in the discretion of the Court under s 43(2) of the Federal Court of Australia Act 1976 (Cth) ( Inground Constructions Pty Ltd v Federal Commissioner of Taxation (1994) 27 ATR 513 ; Sullivan v Secretary, Department of Defence [2005] FCA 786 at [13] (Stone J)). The 'conduct of the parties in the matter and the reasons for the discontinuance can bear heavily on the exercise of the discretion as to costs' ( O'Neill v Mann [2000] FCA 1680 at [13] (Finn J); Sullivan at [13] (Stone J)). (2) A fortiori the significance of discretionary considerations in a case where the discontinuance is merely the procedural vehicle to terminate the dispute, and any futility in the proceedings has not been brought about by an external event, or the applicant's change of heart (cf., Smith v Airservices Australia [2005] FCA 997 ; (2005) 222 ALR 464 at [58] [59]), but by the opposing party's change in position. (3) Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] HCA 6 ; (1997) 186 CLR 622 at 624 625 suggests a structure for the exercise of a broad discretionary power. It does not lay down a rule which substitutes for the discretion of the Court. The critical considerations were stated by McHugh J as follows: 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. 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. 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 13], 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... 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. (4) Without a hearing on the merits, the Court is unable to be guided by the general rule as to costs. The difficulty cannot be resolved by embarking on a hypothetical consideration of which party would have been successful had the action proceeded. But the Court may consider the reasonableness of the conduct of the respective parties until the discontinuance ( Smith v Airservices at [46] [47]). The Minister referred to the Court's broad discretionary power in relation to costs afforded by s 43 of the Federal Court Act; noted that the discretion should be exercised judicially and referred to the same passage in the reasons of McHugh J in Lai Qin referred to by the applicant and recited in [26(3)] above. It lay at the heart of the Minister's submissions that the Minister's decision to grant the applicant a s 195A visa did not render the declaratory relief he sought in NSD 17/2009 'moot'. According to the Minister, the issue of whether or not the applicant is in fact the holder of a TP visa is a live issue in that there remains a real and ongoing dispute between the parties as to the entitlement of the applicant to remain in Australia beyond the life of the s 195A visa granted to him; while the urgency of the resolution of that dispute is no longer present, that fact does not render the dispute between the parties moot. The Minister submitted that the power he ultimately exercised to grant the applicant a s 195A visa is a 'non-compellable' power and the failure of the Minister to exercise that power by any particular date, or at all, can never be unreasonable in the relevant sense.