Losing Appellant Does Not Always Have to Pay Costs

On some occasions the court will not award costs against an unsuccessful appellant.  One of those is Hussain v Minister for Foreign Affairs [2008] FCAFC 128 (15.7.08) which was a complicated case about the denial of a passport for security reasons.  Here’s why the court did not award costs against the losing appellant:

179 The power to award costs conferred by s 43 of the Federal Court of Aust Act 1976 (Cth) is discretionary. In the past, this Court has held that there may be a sound basis for departing from the usual principle that costs follow the event in particular appeals from the Tribunal. The applicant submits that by making no order as to costs, the wider public interest in promoting sound administrative decision-making will be served. He says that his challenge to the validity of ss 39A & 39B raised issues of public importance. By implication, he relies upon the fact that the passport decision involved a fundamental freedom, which could almost be described as the liberty of the subject.

180 The respondents submit that the award of costs is in the discretion of the Court and is broad and unconfined. However, it is a discretion that must be exercised judicially and according to principle. They say that costs are routinely awarded against appellants who unsuccessfully challenge decisions of the Tribunal under s 44(1) of the AAT Act.

181 In Perrett v Commissioner for Superannuation (1991) 29 FCR 581, a Full Court of this Court observed that in deciding whether to make an order for costs in such an appeal, the Court should bear in mind the result but also take into account the reasonableness of the applicant in bringing the appeal and the general importance of the clarification of the law that the appeal entailed. Similar views were expressed in Shelton v Repatriation Commission (1999) 85 FCR 587.

182 … this appeal from the AAT was not without any reasonable prospect of success. The Court arrived at its conclusion only after extensively reviewing the authorities and carefully considering each of the competing contentions. Some of these contentions were finely balanced. The law may have been clarified in the course of deciding this case.

183 In the end, a combination of factors has led us to conclude that there should be no order as to costs. Ss 39A & 39B are new and represent a significant departure from procedures normally followed before the Tribunal. They have been the subject of only limited judicial consideration. There is a wider public interest in having the question of their validity determined. The applicant’s challenge to these provisions, though ultimately unsuccessful, was reasonable. [the respondent] properly conceded that the process mandated by these provisions was unfair and that fact, together with the consequences for the applicant of being denied his freedom to travel, justifies the challenge that was brought. Taken together, these factors warrant a departure from the usual order as to costs. Accordingly, there will be no order as to costs.