Federal Court of Australia Hill v Minister for Infrastructure, Transport, Regional Development and Local Government [2024] FCA 494 File number: NSD 1589 of 2023 Judgment of: SHARIFF J Date of judgment: 14 May 2024 Catchwords: COSTS – where applicant sought judicial review of decision of Minister's delegate to grant dispensations under s 20(1) of the Sydney Airport Curfew Act 1995 (Cth) – where Minister's delegate revoked each of the dispensations the subject of the application after applicant had commenced proceedings – where applicant sought to recover costs of bringing application on basis that the Minister had effectively surrendered to the relief sought – consideration of whether bringing of application was reasonable – consideration of whether Minister had effectively surrendered – held that parties should bear their own costs Legislation: Administrative Decisions (Judicial Review) Act 1977 (Cth) s 11 Judiciary Act 1903 (Cth) s 39B Sydney Airport Curfew Act 1995 (Cth) s 20(1) Federal Court Rules 2011 (Cth) r 26.12(7) Cases cited: Bell IXL Investments Ltd v Life Therapeutics Ltd [2008] FCA 1457 Capic v Ford Motor Company of Australia Ltd (Costs Forthwith) [2019] FCA 1065 FCA US LLC v Mahindra Automotive Australia Pty Ltd [2021] FCA 1091 Howards Storage World Pty Ltd [2010] FCAFC 5; (2010) 182 FCR 84 Rawson Finances Pty Ltd v Commissioner of Taxation [2013] FCAFC 26 Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Quin (1997) 186 CLR 622 Division: General Division Registry: New South Wales National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 33 Date of last submission/s: 30 April 2024 Date of hearing: 9 April 2024 Solicitor for the Applicant: Mr N Yalda of Henry William Lawyers Solicitor for the First Respondent: Ms J Connolly of Australian Government Solicitor Table of Corrections 30 May 2024 Date of order amended to '14 May 2024' ORDERS NSD 1589 of 2023 BETWEEN: KEVIN HILL Applicant AND: MINISTER FOR INFRASTRUCTURE, TRANSPORT, REGIONAL DEVELOPMENT AND LOCAL GOVERNMENT Respondent order made by: SHARIFF J DATE OF ORDER: 14 May 2024 THE COURT ORDERS THAT: 1. The proceedings be dismissed. 2. The parties bear their own costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT SHARIFF J: INTRODUCTION 1 This decision deals with the question of costs. Both the applicant (Mr Hill) and the respondent (the Minister) seek their costs of the proceedings. They both seek costs in circumstances where there has been no hearing on the merits and the agreed position of the parties is that the proceedings should be dismissed. 2 For the reasons that follow, each party should bear their own costs. BACKGROUND 3 The background to the application for costs relates to certain decisions made by the Minister and her delegate to grant dispensations under s 20(1) of the Sydney Airport Curfew Act 1995 (Cth) (the SAC Act). Specifically, on or about 28 June 2023, the Minister's delegate made decisions to grant dispensations under s 20(1) of the SAC Act to Pionair Australia, Qantas Freight Enterprises and Team Global Express (the dispensation decisions). The dispensation decisions were expressed to operate for the period from 2 July 2023 to 1 July 2024. The effect of such dispensations was to authorise aircraft operated by the three operators to take off from, or land at, Sydney Airport at times of day and night that would otherwise fall foul of the curfew periods prescribed by or under the SAC Act. 4 Mr Hill is a resident of Kurnell and was affected by the noise generated, or to be generated, by aircraft flying in the curfew periods pursuant to the dispensation decisions. Mr Hill is also a community member of both the Sydney Airport Community Forum and the Sydney Kingsford Smith Airport Long Term Operating Plan, Implementation and Monitoring Committee. 5 On 2 November 2023, Mr Hill commenced an application in this Court for judicial review in respect of the failure or refusal of the Minister to provide reasons for the dispensation decisions. On 13 November 2023, Yates J made orders requiring the Minister to provide Mr Hill with a statement of reasons for the dispensation decisions, which the Minister did on 27 November 2023. On 12 December 2023, Yates J made orders by consent dismissing the application for reasons and ordered that the Minister pay Mr Hill's costs of that application as agreed or taxed. 6 On 28 December 2023, Mr Hill commenced a second application in this Court seeking judicial review of each of the dispensation decisions. That application was allocated to my docket. At a case management hearing on 9 April 2024, the parties advised me that on 31 January 2024, the Minister's delegate had revoked each of the dispensations the subject of the application (the revocation decisions), and, as a result, Mr Hill was seeking to discontinue the proceedings. The only issue left between the parties was who should bear the costs of the application. THE PARTIES' SUBMISSIONS Mr Hill's submissions 7 Mr Hill contends that the Court should order the Minister to pay his costs on a lump sum basis in the amount of $27,731.77 (including GST). 8 Mr Hill points out by way of background that it would appear that the dispensation decisions were made in favour of the three commercial organisations due to "the need to find a practical solution between now and the opening of the Western Sydney Airport". The statement of reasons for the dispensation decisions stated that each of the dispensations applied "from 2 July 2023 to 1 July 2024". In these circumstances, Mr Hill submits that the Court should infer that the dispensations would have continued until at least 1 July 2024, or that further dispensations would have been granted to extend the dispensations until the opening of Western Sydney Airport. 9 Mr Hill submits that after he received reasons for the dispensation decisions on 24 November 2023, he was notified that the dispensation decisions were under review and that a decision would be made "no later than 31 January 2024". He contends that, having regard to all of the circumstances, he acted reasonably in commencing the present application within the 28-day deadline imposed by s 11 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) in circumstances where the objective evidence indicated that there was no certainty that the Minister would revoke the dispensation decisions. 10 Mr Hill contends that the Minister effectively surrendered to the relief sought by Mr Hill and that he was the successful party as the Minister's decision to revoke the dispensation decisions was in substance to the same effect as the orders he sought and addressed his grievances. Mr Hill relies on the decision of McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Quin (1997) 186 CLR 622 in support of the proposition that, when a party effectively surrenders, it is often appropriate to make an award of costs in favour of the party receiving the effective surrender: see FCA US LLC v Mahindra Automotive Australia Pty Ltd [2021] FCA 1091 at [35]. Mr Hill submits that the Court should infer from the objective evidence that his application for judicial review was the reason for the Minister's decision to revoke the dispensations: citing Bell IXL Investments Ltd v Life Therapeutics Ltd [2008] FCA 1457 at [14] and Rawson Finances Pty Ltd v Commissioner of Taxation [2013] FCAFC 26 at [88]. Mr Hill relies on the fact that: (a) the statement of reasons in respect of the dispensation decisions stated that each of the decisions applied until 1 July 2024, and there was otherwise no reason to review the decisions until the time they were set to expire; (b) the revocation decisions occurred after his application for judicial review of the dispensation decisions was commenced; and (c) a request by Mr Hill for the Minister's reasons for the dispensation decisions made on 26 February 2024 was refused and no reasons have been given to provide any other explanation for the revocation decisions. 11 Mr Hill submits that if the Court were to decline to draw such an inference, it would necessarily need to accept the counterfactual that the Minister would have reviewed or revoked the dispensation decisions regardless of whether Mr Hill commenced the present application. He submits that this counterfactual is not compelling given that the dispensations had been in operation since July 2023 and were to remain in operation until 1 July 2024. Mr Hill points out that the dispensation decisions had not been revoked prior to his application to this Court despite various requests from Mr Hill and other community members. 12 Mr Hill further contends that the Minister's decision to revoke the dispensation decisions had the same practical effect as each form of relief he sought, namely, preventing the noise resulting from aircraft flying overhead during curfew times. In this regard, Mr Hill submits that he commenced the application seeking an order quashing, or setting aside, each of the dispensation decisions and a declaration that each of the dispensation decisions or the instrument under which they were made were invalid. He submits that each of those orders would have had the practical effect of quashing, or setting aside, or invalidating the dispensation decisions, and that the Minister's decisions to revoke them had the same effective result. 13 Mr Hill seeks his costs on the basis of a lump sum costs order. He has filed evidence that, after allowing for appropriate deductions and discounts, his costs should the subject of a lump sum costs order fixed in the sum of $27,731.77 (inclusive of GST). The Minister's submissions 14 The Minister submits that Mr Hill should not be entitled to his costs, and further submits that the Minister should be entitled to her costs, or, alternatively, that there should be no order as to costs, other than the costs incurred in preparing submissions in relation to the issue of costs. 15 The Minister submits that Mr Hill's application should never have been commenced. The Minister contends that (unlike the applicant in Lai Quin) Mr Hill was on notice, before commencing the proceeding, that the dispensation decisions were being reviewed on the delegate's own motion. The Minister submits that it should have been obvious to Mr Hill and his legal representatives, that regardless of the outcome, filing an application prior to the conclusion of that internal review was bound to waste costs. The Minister submits that a reasonable party would have postponed any application to the Court to see whether the internal review gave the remedy they were proposing to seek without the incurring of any costs. The Minister contends that, to the extent Mr Hill was concerned about making an application within the time specified in the ADJR Act, he could have sought assurances from the Minister that no delay point would be taken, or, alternatively, he could have filed an application under s 39B of the Judiciary Act 1903 (Cth) which has no time limit. 16 Next, the Minister submits that there is no reasonable basis for concluding that Mr Hill's application was a factor in the revocation decisions. In response to Mr Hill's submissions on this point, the Minister submits that: (a) the review was already underway before Mr Hill brought the present application; (b) the resolution of the proceedings was an irrelevant consideration for the Minister to take into account in making decisions under s 20(1) of the SAC Act, and in the absence of evidence that it was taken into account, it should be assumed that it was not; and (c) although a statement of reasons was not given to Mr Hill as to the revocation decisions, an explanation was given to him, namely, that the delegate was not satisfied at the time of the revocation decisions that exceptional circumstances existed for the purposes of s 20(1) of the SAC Act. 17 In these circumstances, the Minister submits that she did not surrender to the relief sought by Mr Hill. Rather, the Minister contends that there was here a coincidence between the result of a decision-making process that was already in train, and a proceeding brought prematurely by Mr Hill. 18 Further, the Minister submits that she has been put to the expense of defending an unnecessary application and should be entitled to her costs. The Minister contends that Mr Hill has not shown a reason why the ordinary rule that, where a matter is discontinued, the respondent is entitled to their costs, should not apply: r 26.12(7), Federal Court Rules 2011 (Cth) (the Rules). The Minister submits that her costs should be fixed at $6,000, which represents a discount on the costs actually incurred. 19 Alternatively, the Minister submits that it is within the Court's discretion to order that there be no order as to costs if it is satisfied that there was a good basis for Mr Hill to bring the proceedings. However, the Minister contends that, in that case, the Minister should nonetheless receive its costs from the date of the case management hearing on 9 April 2024 at which she offered to resolve the matter on the basis that each party bear their own costs (which offer was not taken up by Mr Hill). The Minister submits that those costs should be fixed at $1,000. 20 Finally, the Minister submits that, if the Court was minded to award Mr Hill his costs, the quantum should be far less than the $27,731.77 claimed. The Minister contends that that amount is excessive for a judicial review proceeding in which the only steps taken to date have been the filing of an originating application, a case management hearing and a costs application. The Minister submits that an amount of no greater than $4,000 plus disbursements was warranted. CONSIDERATION It was reasonable for Mr Hill to commence the proceedings 21 The starting position for a consideration of the matter is that under s 20(1) of the SAC Act a relevant dispensation may be granted if the Minister is satisfied that there are exceptional circumstances justifying the grant of the dispensation. On the evidence before me, the Minister's delegate on 28 June 2023 reached such a state of satisfaction in respect of the dispensations granted to the three commercial operators. Those dispensations were to operate until 1 July 2024. 22 Thereafter, the Minister refused to give to Mr Hill and the members of the community groups and committees of which he was a member, the statement of reasons for making the dispensation decisions. On the evidence before me, it was only after Mr Hill succeeded in this Court in obtaining orders for the provision of the statement of reasons that the Minister indicated that there would a review of the grant of the dispensation decisions. Such an internal review was expressed to conclude by no later than 31 January 2024. The 28-day period for seeking a review under the ADJR Act was due to expire on 25 December 2023. 23 In my view, it was reasonable for Mr Hill to have commenced proceedings in this Court seeking judicial review of the dispensation decisions within the time limit specified in the ADJR Act. At the time the application was commenced, there had been no outcome from the Minister's review. Nor was there any certainty as to the outcome of the review, let alone any assurance that the dispensation decisions would be revoked. Whilst it may have been open to Mr Hill to seek undertakings from the Minister that she would not take a "delay point" in the event of a late filed application under the ADJR Act or to have brought an application under s 39B of the Judiciary Act, I do not consider that Mr Hill acted unreasonably in commencing proceedings within the time limit prescribed in the ADJR Act given the adversarial processes that had preceded the commencement of these proceedings. It is to be recalled that Mr Hill had earlier commenced separate proceedings against the Minister in this Court to secure the provision of the statement of reasons for the dispensation decisions. Given this adversarial context, it was reasonable for Mr Hill to think that he would need to take steps to protect his position as against the Minister, given that the Minister to that point in time had not been cooperative in respect of the positions advanced by him. When Mr Hill foreshadowed that he would be commencing the current proceedings, the Minister's representatives stated that, whilst they were unsure of the relief Mr Hill would be seeking, there was no utility to the proceedings in circumstances where there was an internal review on foot. However, the utility of the proceedings was that in the event that the review was not favourable to Mr Hill, he would have the opportunity to seek to set aside the dispensation decisions. Each party should bear their own costs of the proceedings 24 Having concluded that it was reasonable for Mr Hill to have commenced these proceedings, the next question that arises is whether I should exercise a discretion to award costs when there has been no hearing on the merits. The exercise of that discretion is unfettered, and no rule or principle should be applied mechanically in the determination of where costs should lie in any particular case: Howards Storage World Pty Ltd [2010] FCAFC 5; (2010) 182 FCR 84 at [17] per Gray J with whom Lindgren J agreed. Ordinarily, the Court will not make an order for costs in circumstances where there has been no hearing on the merits: Lai Qin at 624-5. There are exceptions to this general principle: see Mahindra at [32]; Capic v Ford Motor Company of Australia Ltd (Costs Forthwith) [2019] FCA 1065 at [10] per Perram J. The Court may make an order of 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: Mahindra at [33]; (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]; (d) the Court is satisfied that one party has effectively surrendered or capitulated: Mahindra at [35]. 25 In relation to the issue of whether one party has effectively surrendered or capitulated, Halley J helpfully summarised the principles that have emerged from the authorities in Mahindra at [35] as follows: (a) either an applicant or respondent might be found to have effectively surrendered or capitulated; (b) it is necessary to have regard to the conduct of the parties not to determine whether a party has acted in a manner that can objectively be characterised as unreasonable, but rather to determine whether by their respective conduct one party has, in substance, capitulated or surrendered to the other party: see generally Chapman v Luminis Pty Ltd [2003] FCAFC 162 (Chapman) at [5]-[8] (Beaumont, Sundberg and Hely JJ); Zhao v Suzhou Haishun Investment Management Co Ltd [2020] VSCA 34 at [19]-[20] (Tate, McLeish and Hargrave JJA); cf Diamond Ace Super Fund Pty Ltd v Rodapa Development Pty Ltd [2020] FCA 1582 (Diamond Ace) at [65]-[68] (Griffiths J); (c) it is necessary to distinguish between cases in which a party seeking to discontinue proceedings can be said to have effectively surrendered or capitulated and cases in which a supervening event renders the proceedings futile or moot: Diamond Ace at [59] (Griffiths J) citing Travaglini v Raccuia [2012] FCA 620 at [13] (McKerracher J); and Chapman at [7], citing ONE.TEL Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548; [2000] FCA 270 (ONE.TEL) at [6] (Burchett J); (d) an assessment of the degree to which the outcome achieves the relief sought is a threshold issue of significant weight in determining whether a party has effectively surrendered or capitulated. A party does not have to achieve complete success in order to establish that the other party effectively surrendered or capitulated. It is enough to demonstrate that the outcome secured sufficiently achieves the party's purpose in bringing the proceedings: Diamond Ace at [67]; Balanggarra Aboriginal Corporation v State of Western Australia [2018] FCA 1538 (Balanggarra) at [50] (Barker J); Stephens v Sena, in the matter of Vtara Solar Pty Ltd [2020] FCA 1179 at [30] (Stewart J); (e) generally it is not the function of the Court to make a prediction as to the outcome of a hypothetical case in assessing the degree of success or failure achieved by a party in proceedings in which there has been no determination of the merits: Elevate Brandpartners Ltd v Hammond (No 4) [2020] FCA 421 (Elevate Brandpartners (No 4)) at [20] (Stewart J); Clark v ING Life Limited [2007] FCA 1960 at [16] (Rares J); Rickus v Motor Trades Association of Australia Superannuation Fund Pty Limited (2010) 265 ALR 112; [2010] FCAFC 16 at [118]-[119] (Jacobson, Siopis and Foster JJ); Mineralogy Pty Ltd v National Native Title Tribunal [1998] FCA 1700 at 6 (Lee, Tamberlin and R D Nicholson JJ); and (f) in some cases it is relevant to have regard to the likelihood of success, but only insofar as it is possible to identify a likely "clear winner": ONE.TEL at [7]; and Balanggarra at [71]-[73]. 26 Mr Hill's contention that, in the absence of being provided reasons for the revocation decisions, the Court should infer that the reason for the revocation decisions was the commencement of these proceedings, requires an examination of the claims that Mr Hill sought to advance in these proceedings to ascertain whether the Minister has in effect surrendered to them. Mr Hill's application for judicial review to this Court sought, amongst other things, orders quashing or setting aside the dispensation decisions on the basis of seven grounds of review. By way of summary, those seven grounds alleged that: (a) the delegate who made the dispensation decisions, did not hold a lawful delegation to exercise the power in s 20(1) of the SAC Act; (b) the delegate's exercise of power under s 20(1) was invalid in that, amongst other things, he sought to authorise each of the commercial operators to use aircraft to make additional movements per week during the curfew periods, but did not authorise a particular aircraft to do so for that purpose; (c) the delegate misconstrued the power to grant a dispensation under s 20(1) in various ways including as to the meaning of the phrase "exceptional circumstances justifying the take-off or landing"; (d) the delegate failed to exercise jurisdiction or, alternatively, misconstrued the Sydney Airport Curfew (Dispensation) Guideline 2016, in relation to various alleged requirements of that Guideline; (e) the delegate exercised the power in s 20(1) for an improper purpose including to "ensure connectivity in the overnight freight market"; (f) the delegate's decisions were legally unreasonable in that, amongst other things, he could not have reasonably or lawfully reached the state of satisfaction that there were exceptional circumstances justifying the proposed take-offs and landings for various reasons; (g) the dispensation decisions amounted to the adoption or implementation of a plan for aviation airspace management that would have or was likely to have a significant impact on the environment within the meaning of s 160(1) of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) without the delegate having obtained and considered advice from the Minister administering that Act, which amounted to an improper exercise of power. 27 There is no evidence before me that the Minister accepted any of these claims and I am not satisfied that the Minister effectively surrendered or capitulated on that basis. Mr Hill seeks that I draw the contrary inference because the dispensation decisions were to operate until 1 July 2024 and, in the absence of being provided with the statement of reasons, it should be inferred that the revocation decisions were made by reason of these proceedings. Whilst the Minister did not provide Mr Hill with reasons for the revocation decisions, the evidence before me establishes that the Minister's representatives did provide Mr Hill with some, albeit limited, information as to those reasons, as follows: In the interests of providing some explanation for the decision, our client advises that a delegate undertook a review of the circumstances surrounding the dispensations and, following extensive consultation with various stakeholders (including your client), the delegate formed the view that exceptional circumstances did not presently exist to justify the continuance of the dispensations. Accordingly, the delegate decided to revoke the dispensations. 28 This evidence (as limited as it is) does not support Mr Hill's contention that the Minister surrendered or capitulated to the claims he made. Rather, on the evidence available to me, it appears that the revocation decisions were made after further consultations were held and it was determined that exceptional circumstances no longer existed. This did not amount to a surrender or capitulation to the claims that Mr Hill was advancing. It may be that the internal review was initiated by reason of the apparent complaints from members of the community, including Mr Hill, but it does not follow that the revocation decisions were an effective surrender to these proceedings. 29 Mr Hill's further contention that in substance he was the successful party rests upon his submission that the effect of the revocation decisions is that he has secured the relief he sought in these proceedings. This is too simplistic an analysis of what happened here. True it is that the effect of the revocation decisions is that the dispensation decisions no longer apply. However, that has been brought about because, on the evidence before me, the Minister's delegate initiated a review prior to the commencement of these proceedings which resulted in the revocation decisions. Although the outcome was not known at the time of the commencement of the proceedings, it was an outcome brought about by reason of a process independent to these proceedings and the claims being advanced in them. 30 It follows that I am not satisfied that Mr Hill should be awarded his costs. Had I been so satisfied, I would have acceded to the application to make a lump sum costs order in favour of Mr Hill, but I would not have accepted the claimed amount of $27,731.77. In arriving at that amount, Mr Hill's representatives put evidence before the Court that Mr Hill had incurred, or was to incur, solicitor/client costs in the amount of $19,096.77 (representing a discount of 30% on costs actually incurred of $27,281.10), both in bringing the application for judicial review and in preparing submissions and evidence on the issue of costs, as well as $8,635.00 in disbursements (including Counsel fees). I do not consider the quantum of these costs to be proportionate to the materials that have been filed in support of the application for review or the costs application, or to be otherwise fair and reasonable. The only steps that had been taken on Mr Hill's behalf in the proceedings were the preparation and filing of an Originating Application, a supporting Affidavit, attendance at a case management hearing, and correspondence between the parties. Had I been persuaded to award Mr Hill his costs, I would have allowed recovery of no more than $10,000 plus disbursements in respect of this work. In regard to the costs application, Mr Hill's representatives prepared submissions that were slightly longer than 3 pages, an Affidavit of 7 pages which set out the costs that had been incurred in the proceedings and attached relevant correspondence and prepared submissions in reply of 2 pages. I would have allowed Mr Hill to recover no more than $4,000 in respect of the costs application. 31 I am also not satisfied that Mr Hill should pay the Minister's costs in respect of the proceedings or the costs application. Although the ordinary rule in r 26.12(7) of the Rules is that the respondent is entitled to costs on a discontinuance, there is good reason for departure from that ordinary rule in the present case. That is because, for the reasons I have set out above, I am satisfied that it was reasonable for Mr Hill to have commenced the proceedings notwithstanding that the dispensation decisions were being reviewed. And, there is good reason now to dismiss the proceedings having regard to the revocation decisions. 32 I am also not satisfied that Mr Hill should pay the Minister's costs of the costs application. I accept that the Minister had earlier offered to resolve the question of costs on the basis that each party bear their own costs before Mr Hill made an application for costs, but the Minister's position was conveyed in circumstances where the Minister had given limited information to Mr Hill as to the reasons for the revocation decisions. The only information that Mr Hill had been given was that which I have set out above at [27]. Given the paucity of information provided to Mr Hill as to the reasons for the revocation decisions, I do not consider that he acted unreasonably in refusing a "walk away" costs offer at that time. Although Mr Hill has not persuaded me that the Minister effectively surrendered to his claims or that he has been substantially successful, I also do not consider that it was unreasonable for him to have advanced those arguments within the limits of the information available to him. DISPOSITION 33 For the foregoing reasons, I will order that the proceedings be dismissed on the basis that each party bear their own costs. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Shariff. Associate: Dated: 14 May 2024