Federal Court of Australia Kaur v Minister For Immigration, Citizenship, Migrant Services And Multicultural Affairs (Costs) [2020] FCA 1247 File number: WAD 98 of 2020 Judgment of: MCKERRACHER J Date of judgment: 27 August 2020 Catchwords: COSTS – discontinuance – where further prosecution of the proceeding has become futile – whether there is any reason to depart from the ordinary rule that there be no order as to costs – whether either party acted unreasonably by continuing proceedings after certain points – Re Minister for Immigration & Ethnic Affairs; Ex parte Lai Qin 186 CLR 622 applied Held: No order as to costs Legislation: Federal Court Rules 2011 (Cth) r 26.12 Cases cited: Blatch v Archer [1774] EngR 2; (1774) 1 Cowp 63; (1774) 98 ER 969 Clark v ING Life Limited [2007] FCA 1960 DQR16 v Minister for Immigration and Border Protection [2017] FCA 96 El Ossman v Minister for Immigration and Border Protection [2017] FCA 636; (2017) 248 FCR 491 Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v PDWL [2020] FCA 394 Re Minister for Immigration & Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 Yates Property Corporation Pty Ltd v Boland [2000] FCA 1106; (2000) 179 ALR 664 Division: General Division Registry: Western Australia National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 29 Date of last submissions: 14 August 2020 Date of hearing: Determined on the papers Counsel for the Applicant: M Guo Solicitor for the Applicant: Estrin Saul Lawyers Counsel for the Respondent: P Knowles Solicitor for the Respondent: Sparke Helmore ORDERS WAD 98 of 2020 BETWEEN: MONICA KAUR Applicant AND: MINISTER FOR IMMIGRATION, CITIZENSHIP, MIGRANT SERVICES AND MULTICULTURAL AFFAIRS Respondent order made by: MCKERRACHER J DATE OF ORDER: 27 AUGUST 2020 THE COURT ORDERS THAT: 1. There be no order as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MCKERRACHER J: 1 The applicant applied for Australian citizenship on 15 May 2017. The proceeding, which sought mandamus requiring the respondent (the Minister) to determine the applicant's citizenship application, was commenced on 26 April 2020. At that time there was a pending investigation in relation to the applicant by an external federal agency. The investigation began in January 2018 and concluded in May 2020. 2 On 20 May 2020, the solicitors for the Minister wrote to the applicant's solicitors and stated that the reason for the delay was that, until May 2020, the applicant was the subject of an investigation by an external federal agency. The email (when read with earlier correspondence of 14 May 2020 and 19 May 2020) informed the applicant that: (a) she would be sent a letter from the Minister inviting her to comment on certain adverse information in relation to her application (a 'natural justice letter') by 22 May 2020; and (b) her application would be decided within four weeks of receipt of her response to that letter (subject to any further inquiries required as a result of that response). 3 As had been foreshadowed by the Minister, the applicant was sent a natural justice letter on 21 May 2020. She responded to that letter on 19 June 2020. A decision on the citizenship application was then made on 16 July 2020, being a date that was less than four weeks from the date on which the Minister received the applicant's response to the natural justice letter. The decision made on 16 July 2020 was to refuse the applicant's citizenship application. 4 The refusal of the applicant's citizenship application makes further prosecution of these proceedings futile. The Minister contends that the position as to costs in such circumstances is to be determined having regard to the principles outlined by McHugh J in Re Minister for Immigration & Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622; see also Yates Property Corporation Pty Ltd v Boland [2000] FCA 1106 per Goldberg J (at [4]-[5]). In Qin, McHugh J held (at 625): 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. 5 Contrary to the usual position as described by McHugh J that there should be no order as to costs, the applicant submits that the circumstances of this case including her achievement of substantially the outcome sought in the originating application, justify an award of costs in her favour, for at least some, if not all of her party-party costs. 6 The Minister accepts that given the time that had elapsed since making the citizenship application, it was reasonable for the applicant to commence these proceedings. At that point in time, she was not aware of the pending external investigation. However, the Minister says he did not unreasonably delay the making of a decision. He submits that it was reasonable to delay making a decision on such a significant issue as citizenship until an external agency had completed its investigation: see DQR16 v Minister for Immigration and Border Protection [2017] FCA 96 per Griffiths J (at [6]-[7]). 7 In contrast, the Minister contends it was unreasonable for the applicant to continue to prosecute the proceedings after 20 May 2020. Upon receipt of that correspondence, the applicant was on notice of the reason for the delay in processing her citizenship application and, more importantly, was given assurance that a natural justice letter would be issued promptly and her application determined within a relatively short period after receiving her response. The Minister says that assurance made the further conduct of the proceeding unnecessary: cf El Ossman v Minister for Immigration and Border Protection (2017) 248 FCR 491 per Wigney J (at [157]). 8 Importantly, the Minister's position is supported by an affidavit of Mr Richard Johnson, Public Servant, who relevantly claims public interest immunity in relation to documents that form part of the Minister's Department's file in relation to the applicant's citizenship application under the Australian Citizenship Act 2007 (Cth) (Department file BCC2017/1015510). The documents relate to the investigation undertaken by an external federal agency. The bases upon which the claim for public interest immunity is made are as follows: (a) Some of the documents contain information which would tend to disclose the identity of a confidential informer who provided information to the Department and an external federal agency (category 1 documents). That information related to law enforcement matters and the administration of the Act. (b) Some of the documents contain information relating to an investigation by an external federal agency that began in January 2018 and concluded in May 2020 (category 2 documents). Mr Johnson deposes to his belief that harm may be caused to the alleged victim of the conduct that was the subject of the investigation if the category 2 documents are disclosed. 9 Mr Johnson has produced the documents in a sealed envelope saying that he is not aware of any reason which would prevent the Court from viewing the documents contained in the confidential annexures to the affidavit in order to determine their admissibility in this proceeding. Shortly after submissions were filed, the sealed envelopes were delivered to the Court for inspection. Mr Johnson says that the Department is often provided with information from third parties that either is, may be, or may purport to be relevant to a citizenship applicant's eligibility to meet particular requirements for the grant of Australian citizenship by conferral (community information). He is also aware that it is common for such third parties to either withhold their identity and/or their contact details, or request that this type of information be concealed from a citizenship applicant (identifying information). The Department relies on community information when administering the Act. There is a public interest in protecting third parties by not revealing identifying information to ensure the Department's continued ability to know ·relevant or potentially relevant facts and circumstances that have not been made known by a citizenship applicant (either deliberately or inadvertently), or are otherwise not known to the Department. There would be an adverse effect on the likely candour and willingness of such persons to provide this information in the future if the Department's ability to keep identifying information confidential is compromised through the revelation of such information, either to a citizenship applicant or other parties. Furthermore, potential disclosure of such information could put the safety of the informer at risk. 10 Mr Johnson says: I am of the opinion that the information contained in Confidential Annexure RJ-1 should not be disclosed to any party, including the Applicant, on public interest grounds on the basis that the information would, if revealed: (a) Disclose the existence of a confidential source of information relating to the enforcement or administration of the Act who provided the information to the Department and an External Federal Agency on a confidential basis; (b) Potentially found an action by the informant for breach of confidence;· (c) Potentially hinder, inhibit or diminish the ability of the Department to properly administer the Act insofar as the Department relies on the receipt of community information from third parties, and the likelihood of the flow of information of this kind "drying-up" in the future, if the Department has been unable to adequately maintain their confidence; (d) Potentially compromise the physical safety and wellbeing of the third parties referred to in the documents, including the confidential informer and the alleged victim that was the subject of the inquiry referred to above; and (e) Potentially compromise the Department's ability to undertake investigations in the future. 11 He further says: Based on my knowledge and experience in my role, I am also aware that information is passed between the Department and external federal agencies where the Department has information of relevance to the functions of the external federal agency or vice versa. The category two documents are an example of this transfer of information. I am of the opinion that the information contained in Confidential Annexure RJ-2 should not be disclosed to any party, including the Applicant, on public interest grounds on the basis that the information would, if revealed: (a) Potentially compromise the physical safety and wellbeing of the alleged victim of the conduct that was the subject of the investigation; (b) Potentially hinder, inhibit or diminish the ability of the Department to properly administer the Act insofar as the Department relies on the receipt of information from third parties including external federal agencies, and the likelihood of the flow of information of this kind "drying-up" in the future, if the Department has been unable to adequately maintain the confidence of these third parties; and (c) Potentially compromise the ability of the Department and the external federal agency to undertake investigations in the future. 12 The Minister argues that there should be no order as to costs up to and including 20 May 2020, and thereafter the applicant should pay the Minister's costs. In the alternative, there should be no order as to costs. 13 The applicant stresses that she applied for Australian citizenship on 15 March 2017. On 31 August 2017, the Minister sought further information from the applicant, specifically an 'original penal clearance certificate from Singapore'. She provided a response on 13 December 2017 explaining why she could not reasonably do so. 14 More than seven months passed without response from the Minister. As a consequence, on 18 July 2018, the applicant sought an update but received a two-sentence response: Please be advised that your client's application for Australian citizenship is actively being processed. You will be contacted if the department requires any further documentation. 15 Between then and 5 March 2020 (that is, approximately 20 further months) the applicant sought updates on four further occasions. She received responses that were no more illuminating than of the kind above, or in some cases no responses at all. In particular, the fourth further request (the fifth overall request) for an update, made on 5 March 2020, foreshadowed the commencement of these proceedings, but was not the subject of any response at all. 16 It was for the reason that no decision had been made with respect to the applicant's citizenship application, and the continuing reticence of the Minister to provide even a generalised indication as to when a decision might be made, that on 24 April 2020 the applicant commenced these proceedings. 17 The principal relief she sought included mandamus directing the Minister to make a decision on the citizenship application. Subsequent to the commencement of the proceeding, the applicant says that what transpired was: (a) the Minister identified on 20 May 2020, for the first time, that there was an 'investigation' said to be in relation to the applicant, but declined to provide any further detail. There was a bare assertion by a lawyer that somehow, nothing of the investigation at all, not even the most general details, could be disclosed, even after the event, with the Minister's lawyer giving a vague citation of the Australian Border Force Act 2015 (Cth) but no specific provision of it; (b) the Minister, by his delegate, on 21 May 2020, invited the applicant to comment on certain adverse information, but not once was there any reference to the output of the 'investigation' claimed by a lawyer to have been the reason for the delay. It is most improbable that the matters the delegate referred to (the simple absence of a Singapore police clearance and some local government infringements) would have been the subject of a 27-month 'investigation', and if any aspect of the 'investigation' mattered to the determination of the citizenship application, the Minister would have put that to the applicant for comment, consistent with common law procedural fairness obligations; (c) the applicant responded by letter on 19 June 2020; (d) the Minister, by his delegate, on 16 July 2020, decided to refuse the citizenship application, but not once in the reasons did the delegate make even a general reference to the 'investigation'. 18 The applicant contends there is no cogent evidence explaining why a decision on the citizenship application was not made before these proceedings. All there was, was a solicitor's bare assertion that there was a 27-month investigation that somehow meant the 'citizenship application could not be determined whilst that investigation was active'. There is no evidence as to the nature of the investigation, or why the investigation took as long as it did, or whether it was conducted with any alacrity. Further, the investigation is now complete and the applicant submits that there is no identified barrier to the Minister providing evidence to this Court now, even if at only a high level, and even in a confidential way, of these matters in a way that would avoid revealing investigation techniques or otherwise justify them not having been disclosed to the applicant earlier. While there is merit in this submission, the Minister has since furnished the Court with the two sealed envelopes containing the confidential annexures to Mr Johnson's affidavit that relate to the investigation. They make clear the nature of the investigation and its duration. 19 Nor is there any evidence, it is said, explaining why the Minister did not acknowledge that the applicant had been persistently seeking status updates over a period of many months prior to the commencement of these proceedings. It might be a coincidence that the 'investigation' concluded shortly after the commencement of these proceedings. The applicant simply does not know: As to which, the usual Blatch v Archer [1774] EngR 2; (1774) 1 Cowp 63; (1774) 98 ER 969 considerations apply. 20 However, the applicant does submit that given the evidentiary lacuna, there should be an inference that a decision on the application was only made when it was because of the existence of these proceedings. 21 The Minister ought to have provided the applicant with the courtesy of some form of high level explanation, the applicant says, as to the investigation being the reason for delay in deciding her citizenship application. It was not beyond the capacity of the Minister, equipped with the benefit of lawyers, to do this in a way that would not have jeopardised the investigation: cf Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v PDWL [2020] FCA 394 per Wigney J (at [57]). The applicant contends that had this occurred, these proceedings would not have been brought. 22 Even after the applicant was finally invited to comment on adverse information on 21 May 2020, the applicant says that the proceeding continued to have utility because still no decision had been made: However, conscious of her obligations under s 37M of the Federal Court Act 1976 (Cth), and despite the reluctance of the [Minister] to commit to a date by which a decision would be made (and the shifting sands from the [Minister's] lawyer about when it would be made: originally said to be 6 weeks but later revised by him down, unexplained, to 4 weeks—and which ultimately, was a commitment not met), the applicant agreed to adjourn all case management hearings after the first one, and not take any positive step in the proceedings, so as to avoid unnecessary costs. This was eminently reasonable conduct on her part. 23 The applicant says that ultimately she substantially achieved the outcome she sought by commencing these proceedings (namely, the making of a decision), and she should therefore have her costs. Put another way, the futility of a trial of this proceeding (avoided by the applicant's discontinuance) is now only because of the Minister belatedly making a decision. The default position under r 26.12 of the Federal Court Rules 2011 (Cth) is that a discontinuing party pays the other party's costs, unless there is consent or a contrary order of the Court. The applicant contends the default position is not appropriate given her de facto success: cf Clark v ING Life Limited [2007] FCA 1960 per Rares J. CONSIDERATION 24 I accept the summary of relevant facts referred to by the applicant and on that basis there is no ground on which the applicant's conduct could be said to have been unreasonable at any point. 25 The only question is whether there is a proper basis for a departure from the usual rule in this situation that there be no order as to costs. Certainly the application for leave to discontinue was not an acknowledgement of likely defeat. To the contrary, the applicant has, after a long delay, received a decision having instituted these proceedings seeking relief to that effect. 26 It is not unreasonable to infer that the institution of proceedings perhaps accelerated that result. But I do not consider that the approach in Clark would be appropriate in this instance. Although Ms Clark was awarded costs of her application (only) to discontinue, there were a number of different factors including those recorded by Rares J (at [23]): Mrs Clark suffered the trauma of breast cancer. That trauma was one risk in respect of which she had contracted to have the protection of insurance cover while bringing up a young family. It is not something that can be put to one side as an irrelevant consideration in determining the reasonableness of her course of action. If a person, in the position of Mrs Clark, has to deal with a life threatening illness or condition, such as cancer, she cannot be expected to take immediately every logical, rational or commercial decision which a large corporation with adequate resources and insurance might. Such a decision is particularly difficult for a person in her position, where as an individual, she would be required to take on the burden of litigation against well-resourced insurance companies and insurance brokers, who are entitled to resist the claims made against them. 27 As noted, in Qin (at 624-625), McHugh J commented on the difficulties inherent in a court seeking to allocate costs in circumstances such as the present. As his Honour pointed out, when there has been no hearing on the merits, a court is necessarily deprived of the factor that usually determines whether or how it should make a costs order. 28 The Minister, by exhibiting the confidential materials and his claim for privilege not being challenged has, I consider, adequately explained why the decision took as long as it did. Perhaps the applicant might have been better informed during the process. But as I say the applicant has acted reasonably at all times. I do not consider either party has made good an adequate argument for departure from the Qin position. CONCLUSION 29 The appropriate position is that there be no order as to costs. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McKerracher. Associate: Dated: 27 August 2020