FEDERAL COURT OF AUSTRALIA Tervonen v Minister for Home Affairs (No 2) [2008] FCA 872 PRACTICE AND PROCEDURE – leave to discontinue proceedings – "underlying policy" of Federal Court Rules as to costs – ability to make preliminary assessment as to merits of Motion seeking discovery – no order for costs Federal Court of Australia Act 1976 (Cth), s 43 Federal Court Rules 1979 (Cth),O 15, r 15, O 22, r 3 Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 followed Australian Securities Commission v Somerville (1994) 51 FCR 38 followed Champagne View Pty Ltd v Shearwater Resort Management Pty Ltd [2000] VSC 214 considered Clark v ING Life Ltd [2007] FCA 1960 followed Dutton v Republic of South Africa [1999] FCA 1016, 92 FCR 575 cited Gribbles Pathology Pty Ltd v Health Insurance Commission (1997) 80 FCR 284 followed Minister for Home Affairs v Tervonen [2008] FCAFC 24, 101 ALD 12 cited O'Neill v Mann [2000] FCA 1680 followed Smith v Airservices Australia [2005] FCA 997, 146 FCR 37 followed Tervonen v Minister for Justice and Customs [2007] FCA 1684, 98 ALD 589 cited Trade Practices Commission v CC (New South Wales) Pty Ltd (1995) 58 FCR 426 followed Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 42 FLR 213 followed JAN TERVONEN v MINISTER FOR HOME AFFAIRS AND FINLAND NSD 2467 OF 2007 FLICK J 12 JUNE 2008 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2467 OF 2007 BETWEEN: JAN TERVONEN Applicant AND: MINISTER FOR HOME AFFAIRS First Respondent FINLAND Second Respondent JUDGE: FLICK J DATE OF ORDER: 12 JUNE 2008 WHERE MADE: SYDNEY THE COURT: 1. Notes the assurance of the First Respondent that no reliance is to be placed upon the notice issued under s 16(1) of the Extradition Act 1988 (Cth) on 11 November 2007. THE ORDERS OF THE COURT ARE: 1. Subject to Order 2, leave be given to the Applicant to discontinue the proceedings. 2. Without the prior leave of the Court, no proceedings are to be commenced by the Applicant seeking to review the notice issued under s 16 of the Extradition Act 1988 (Cth) on 11 November 2007. 3. There be no order as to costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2467 OF 2007 BETWEEN: JAN TERVONEN Applicant AND: MINISTER FOR HOME AFFAIRS First Respondent FINLAND Second Respondent JUDGE: FLICK J DATE: 12 JUNE 2008 PLACE: SYDNEY REASONS FOR JUDGMENT 1 These proceedings were commenced by an Application filed in this Court on 18 December 2007. 2 The Application as filed and as subsequently amended sought the review of a notice issued under s 16 of the Extradition Act 1988 (Cth) on 11 November 2007. 3 Prior to the issue of the notice in November 2007, two other notices had also been made pursuant to that section with respect to the Applicant — the first was made on 18 August 2006; the second on 30 April 2007. 4 The August 2006 and April 2007 notices have been the subject of other proceedings. At first instance both notices were declared to be invalid: Tervonen v Minister for Justice and Customs [2007] FCA 1684, 98 ALD 589. On appeal, the order declaring invalid the April 2007 notice was varied and the notice was held not to be a valid notice only with respect to specified offences: Minister for Home Affairs v Tervonen [2008] FCAFC 24, 101 ALD 12. An application for special leave to appeal from the decision of the Full Court has apparently been filed with the High Court. 5 At the same time that proceedings were progressing in respect of the August 2006 and April 2007 notices, the present proceedings came before this Court on a number of occasions. Directions had been made previously for the filing of an Amended Application and for the filing of Affidavits. 6 On 15 April 2008 a Notice of Motion was filed by the Applicant seeking discovery as against both the First Respondent, the Minister for Home Affairs, and the Second Respondent, Finland. 7 That Motion was heard on 30 April 2008. 8 Two difficulties confronted the Applicant in respect of that Motion. The first difficulty was the fact that on 14 April 2008, the Minister had purported to revoke the notice made in November 2007. In such circumstances, the utility in pursuing the proceedings at all at least emerged as an issue which had to be addressed. The Amended Application as filed on 28 March 2008 sought: A declaration that the Notice of Receipt of Extradition dated 11 November 2007 purported to be issued under section 16(1) of the Extradition Act by the Minister for Justice and Customs is invalid. If the Minister's position was that the notice had been revoked, then the objective of continuing the proceedings — other than to preserve any argument as to costs — seemed elusive. If the utility of the relief sought was elusive, that may well have been relevant to the exercise of the discretion to order the discovery sought pursuant to O 15 of the Federal Court Rules. 9 The second difficulty confronting the Applicant's Motion for discovery was the fact that it expressly sought the discovery of documents post-dating the decision made in November 2007. An order for discovery may, of course, be made in judicial review proceedings: Australian Securities Commission v Somerville (1994) 51 FCR 38 at 45. But how the discovery of documents post-dating the decision the subject of judicial review may have been relevant to the November 2007 decision-making process remained largely unexplained. Also unexplained was why such an order would have been "necessary": Federal Court Rules,O 15, r 15. And an applicant for discovery bears the onus of satisfying the Court that an order is "necessary": Trade Practices Commission v CC (New South Wales) Pty Ltd (1995) 58 FCR 426. 10 Counsel for the Applicant contended that the purported revocation of the November 2007 notice was beyond power. Counsel contended that there was simply no power to revoke or withdraw a notice issued under s 16: Dutton v Republic of South Africa [1999] FCA 1016 at [13], 92 FCR 575 at 578 per Wilcox, Whitlam and Moore JJ. However that contention may have been resolved, Counsel accepted that there would be no utility in pursuing the present proceedings if no reliance was to be placed by the Minister upon that November 2007 notice. 11 Finland, it may be noted, also has not placed reliance upon that notice in the Local Court and the Local Court file has been marked "no jurisdiction". 12 Given the revocation, or at least the purported revocation, in April 2008, it was not surprising that Counsel for the Respondent Minister gave the assurance which was sought, namely that no reliance was to be placed upon the November 2007 notice. There then emerged some common ground, namely that there was no utility in further pursuing the proceedings and that the assurance was to be noted by the Court. 13 There then remained to be resolved only the question of costs. Written submissions as to costs were filed by the Applicant on 16 May 2008; the written submissions of the Minister were filed on 29 May 2008; and the Applicant's submissions in reply were filed on 5 June 2008. Notwithstanding the considerable detail canvassed in those written submissions, it is considered that the question of costs can be more simply resolved. 14 All parties were content for the question as to costs to be resolved upon the basis of the submissions filed and no further oral hearing was sought. 15 The Applicant's written submissions urged, in summary form, that leave should be given to discontinue the proceedings and that an order, or at least a limited order, for costs should be made in his favour. An order dismissing the proceedings, it was contended, could not be made without hearing the Application. The Minister's written submissions contended that the proceedings should be dismissed and that there should be no order as to costs, other than an order in favour of the Minister in respect of the Motion for discovery. The dismissal of the proceedings was sought by the Minister to ensure finality. 16 Having considered those submissions, it is considered that leave should be given to discontinue the proceedings, but that such leave should be subject to the condition that no further proceedings are to be commenced in respect to the 11 November 2007 notice without the prior leave of the Court. It is further considered that there should be no order as to costs. 17 The power to order costs, conferred by s 43 of the Federal Court of Australia Act 1976 (Cth), is a discretionary power. The discretion conferred is absolute and unfettered, except that it must be exercised judicially and not arbitrarily or capriciously: Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 42 FLR 213. Order 22, r 3 of the Federal Court Rules does not make express provision for costs where proceedings have been discontinued with the leave of the Court pursuant to O 22, r 2(1)(d): Smith v Airservices Australia [2005] FCA 997 at [39], 146 FCR 37 at 48 per Stone J. Where the leave of the Court is required, the Court has the discretion to impose conditions including as to costs: [2005] FCA 997 at [45], 146 FCR 37 at 49. There is an "underlying policy" in the Rules that a discontinuing party should be liable to pay costs (O'Neill v Mann [2000] FCA 1680 at [13] per Finn J) but that policy has not "hardened into a usual rule": Smith v Airservices Australia [2005] FCA 997 at [44], 146 FCR 37 at 49. The "underlying policy" nevertheless suggests a "starting point" for any consideration of the awarding of costs. 18 One consideration relied upon in concluding that there should be no order for costs is the fact that there was an agreement reached in advance of any final hearing that the proceedings should not further be pursued. From the Applicant's perspective, the assurance offered by the Respondent Minister that there would be no reliance placed upon the November 2007 notice was "as good as a win"; from the Minister's perspective, he maintained that the notice had been validly issued and also validly revoked, but that there was little point in ultimately resolving either contention. How the decision of the Full Court in Dutton was to be addressed remained unexplained. From whichever perspective the proceedings were approached, the result was the same — there was agreement that there was no utility in further pursuing the litigation. 19 In the absence of a hearing on the merits, Finkelstein J has concluded that "it is difficult to see how any order, other than an order that each party bear its own costs, can be made except in special circumstances": Gribbles Pathology Pty Ltd v Health Insurance Commission (1997) 80 FCR 284 at 287. His Honour also there referred to the following summary of propositions provided by Hill J in Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201: (1) Where neither party desires to proceed with litigation the Court should be ready to facilitate the conclusion of the proceedings by making a cost order … (2) It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial…. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue. (3) In determining the question of costs it would be appropriate, however, for the Court to determine whether the applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them … (4) In a particular case it might be appropriate for the Court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation … (5) Where the proceedings terminate after interlocutory relief has been granted, the Court may take into account the fact that interlocutory relief has been granted … Some reservation has been expressed as to whether each party should bear its own costs in the circumstances contemplated by Finkletstein J "except in special circumstances": Champagne View Pty Ltd v Shearwater Resort Management Pty Ltd [2000] VSC 214at [47] per Gillard J. Concurrence is, however, expressed with respect to the general approach as set forth by both Finkelstein and Hill JJ. 20 Where leave is sought to discontinue proceedings pursuant to O 22, r 2(1)(d), the question as to who should bear the costs falls to be determined under s 43(2) of the Federal Court of Australia Act: Clark v ING Life Ltd [2007] FCA 1960 at [16]–[17] per Rares J. Where such leave is sought, it is not the function of the Court to make a prediction as to the outcome. 21 Even though there has been no hearing in respect of the Amended Application seeking review of the s 16 notice issued in November 2007, the hearing of the Applicant's Motion seeking discovery had proceeded virtually to the conclusion of submissions on behalf of the Applicant. Agreement as to the manner in which the proceedings were to be resolved also necessarily carried with it the conclusion that a decision with respect to the Motion became unnecessary. A view had been formed, however, that had it been necessary to resolve the Motion,the Applicant would in all likelihood have been unsuccessful. 22 The approach set forth by Finkelstein J in Gribbles Pathology does not preclude consideration being given to such an assessment as to prospects of success of an application or a motionfiled in proceedings. It may well be inappropriate to entertain submissions for the purpose of forming an assessment as to prospects of success solely to inform the discretion as to costs; but where agreement as to the manner in which proceedings may be resolved has been reached only at a point of time when the Court has in fact entertained submissions and been informed as to the competing submissions of the parties, any preliminary view that a Court has reached at that point of time may be taken into account when making an order as to costs. 23 Such practical success as the Applicant may have achieved in securing the assurance from the Minister that there was to be no reliance placed upon the November 2007 notice — and perhaps thereby entitling him to an order for costs in his favour — has been very much tempered by the lack of success that he would in all likelihood have suffered had the Motion proceeded to decision. Moreover, the discontinuance of the proceedings has denied the Respondent Minister the opportunity of vindicating his position. 24 This assessment of the competing positions of the parties has also been a consideration upon which considerable reliance has been placed in concluding that there should be no order for costs. 25 The preliminary assessment as to the Applicant's prospects of success on his Motion for discovery was such that some consideration has been given separately as to whether the appropriate order was that the Respondent Minister should be paid his costs of the proceedings which were to be discontinued — that being a "starting point" — and his costs of the Motion. On balance, however, it is considered that each party should bear its own costs in the proceedings, including the hearing of the Applicant's Motion for discovery. Although a preliminary assessment as to prospects may have been possible in respect to both the Amended Application and the Motion, neither matter ultimately had to be resolved. Orders 26 The Court: 1. Notes the assurance of the First Respondent that no reliance is to be placed upon the notice issued under s 16(1) of the Extradition Act 1988 (Cth) on 11 November 2007. 27 The orders of the Court are: 1. Subject to Order 2, leave be given to the Applicant to discontinue the proceedings. 2. Without the prior leave of the Court, no proceedings are to be commenced by the Applicant seeking to review the notice issued under s 16 of the Extradition Act 1988 (Cth) on 11 November 2007. 3. There be no order as to costs. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. Associate: Dated: 12 June 2008 Counsel for the Applicant: C Mantziaris Solicitor for the Applicant: DLA Phillips Fox Counsel for the First Respondent: R Beech-Jones SC with KC Morgan Solicitor for the First Respondent: Blake Dawson Date of Hearing: 30 April 2008 Date of Judgment: 12 June 2008