FEDERAL COURT JUDGMENTS indemnity costs (at [24]-[25]). Given the quantum of legal costs in commercial litigation, it was recalled that an offer to “walk away” at a certain point in litigation did represent a genuine compromise, as the offeror was thereby foregoing the possibility of recovering its legal costs incurred to date. Reasonableness of rejection of the Offer The reasonableness of an offer falls to be determined from the perspective of the offeree at the time of the offer, but this question does not involve considering what other offers might hypothetically have been made or other outcomes might hypothetically have been negotiated (at [30]). The Court held that the rejection of the Offer was imprudent and unreasonable due to several factors. First, RPD was aware that Hardingham and REMA were impecunious and that their litigation funding did not cover the adverse costs order below, so there was no real prospect of RPD recovering those costs anyway. Second, RPD was aware that Hardingham and REMA’s litigation funding did not extend to the appeal, such that even if the appeal were ultimately dismissed, any legal costs of the appeal incurred by RPD would likely end up being irrecoverable as well. Third, RPD was aware that Hardingham and REMA’s impecuniosity had been aggravated by the then-current COVID-19 lockdown. Fourth, RPD was indeed able to assess the reasonableness of the Offer because it was aware of the strengths and weakness of the parties’ respective cases: the notice of appeal had already set out the legal issues to be argued by the appellants and RPD was already familiar with the factual issues, which were the same as in the trial below (at [28]). Accordingly, the Court ordered that RPD pay Hardingham and REMA’s costs of the appeal on a party-and-party basis up to the time of the expiry of the Offer, and thereafter on an indemnity basis.
Administrative law – practice and procedure Application for enforcement of undertaking as to damages in administrative law proceedings In Mohamed trading as Billan Family Day Care v Secretary, Department of Education, Skills and Employment (No 3) [2021] FCA 1537 (9 December 2021) the applicant had previously given an undertaking as to damages in support of an application to stay a decision under s15 of the Administrative Decisions (Judicial Review) Act 1977 (Cth), pending the completion
of the judicial review proceeding. The applicant, an operator of a child care service, had sought judicial review of a decision cancelling his provider approval under s195 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) as a child care service for the purposes of the family assistance law (cancellation decision). The Court granted a stay of the cancellation decision until the final determination of the applicant’s originating application on the applicant through her legal representative providing the usual undertaking as to damages. Subsequently the Court dismissed the applicant’s originating application and made orders lifting the stay of the cancellation decision. The respondent (Secretary) then applied for damages pursuant to the applicant’s undertaking as to damages. This case is an example of an attempt to enforce the “usual undertaking as to damages”, which is defined by the Court’s relevant Practice Note as an undertaking to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person affected by the operation of the interlocutory order: see [2.2] in GPN-UNDR. It was common ground that the effect of the stay order was to enable Billan Family Day Care to continue to operate from 28 June 2020 until 20 December 2020 (stay period). During the stay period, the Secretary paid the applicant a total net amount of $921,971.28 in child care subsidies. The applicant also received $354,682.60 in COVID-19 related payments as an approved provider of child care services. The Secretary sought orders for the applicant to pay, by way of damages, both the amount of the child care subsidy payments and the COVID-19 related payments. The Court summarised the applicable legal principles for the enforcement of the undertaking as to damages (at [28]-[29]). Based on the authorities, the purpose of requiring an undertaking as to damages is to compensate the party who has been adversely affected by the interlocutory order, and so ensure that justice is done (at [32]). The effect of an order for damages on the party that has had the benefit of the interlocutory order is not a relevant consideration (at [33]). The Court rejected the applicant’s submission that the undertaking as to damages should not be enforced having regard to the administrative law context in which the stay order was made and the
undertaking given. O’Bryan J explained (at [34]): “. . . there is ‘no hard and fast rule’ (Botany Bay at 86) in the administrative law context that a party seeking interlocutory relief should be required to give an undertaking as to damages. In exceptional instances, a Court might not consider it appropriate to require an undertaking where an applicant in an administrative matter is entitled to interlocutory relief. However, it is apparent from the cited authorities that the appropriate time to consider whether an undertaking as to damages should be given is at the point that the stay application is considered, rather than the time for its enforcement. . . .” Further, there were not any special circumstances that displaced the ordinary presumption that the applicant should compensate the Secretary for damages incurred by reason of the stay order in circumstances where the applicant was not successful in the final determination of its originating application (at [38]). However, the Secretary failed to establish that the Commonwealth should be compensated for the child care subsidy payments made to the applicant during the stay period (at [39]-[44]). Unlike the child care subsidies, the Court found that the Commonwealth would not have incurred, as an outgoing, the COVID-19 related payments made to the applicant during the stay period if the stay order had not been made (at [45]-[49]). The applicant was held liable to pay damages to the Commonwealth pursuant to the undertaking as to damages for the COVID-19 related payments totalling $354,682.60 (at [50]).
Administrative law Decision refusing parole – judicial review – failure to consider submissions advanced by the applicants In Pulini v Assistant Minister to the Attorney-General of the Commonwealth of Australia [2021] FCA 1543 (10 December 2021) the Court heard an application for judicial review of decisions of the Assistant Minister to refuse the applicants parole. The applicants, a married couple, are each imprisoned under federal sentences of imprisonment. The applicants’ first ground alleged that the Assistant Minister was bound, but failed, to consider substantial and clearly articulated submissions made by them. The submissions alleged not to have been considered were: first, that the time of the
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