Writing recently Tom Hickman raised the vital issue that fear of an adverse cost order can prevent potential applicants from seeking judicial review in UK courts with serious consequences for diminishing access to justice. He labelled it “public law’s disgrace” which it undoubtedly is. His calls for reform are necessary and should be supported by the broad public law community.
Hickman’s blog post prompted a reflection and assessment of the state of public law in Australia. Again, in Australia the issue of the impact of adverse costs orders is crucial and more needs to be done on that issue. There have been some encouraging developments though. In one Australian State jurisdiction with a judicial review statute, important provisions concerning costs have been inserted. But more centrally, the role that merits review in tribunals can play in terms of enhancing access to justice must be proclaimed. Tribunals are cheaper to apply to compared with courts, plus resolve matters faster and adverse costs orders are not typically experienced there.
In summary, the public law landscape in Australia is not the disgrace that Hickman considers the UK to be but neither can Australia claim to have attained perfection and there remains room for improvement.
Costs orders in Australian judicial review
In Australia at the Federal level there are two sources of jurisdiction for seeking judicial review – the first under section 75(v) of the Constitution and the second a statute-based option, the Administrative Decisions (Judicial Review) Act 1975 (Cth) (the ADJR Act). The issue of costs is not expressly referenced in either source of jurisdiction. Thus the Australian position at the Federal level remains contextual. Costs are dealt with on an individualistic manner based on the circumstances of the case, but generally the unsuccessful party pays the costs of the successful party unless there are special circumstances.
Although not strictly a judicial review matter, the High Court of Australia had occasion to consider the issue of the award of costs in public interest litigation under environmental litigation in Oshlack v Richmond River Council (1998) 193 CLR 72. This case concerned the destruction of koala habitat during an approved development. The majority three justices (in two separate judgments) determined that costs should not be awarded in accordance with the normal rule that the unsuccessful party pays the legal costs of the successful party – but for differing reasons. The case sparked a widespread debate in the Australian legal community and the matter of costs in public interest litigation has not since been authoritatively resolved or reconsidered.
The need for reform of costs orders, particularly in public interest judicial review litigation, has been the subject of previous academic attention in Australia by Professors Campbell and Groves. The issue of costs has also been the subject of recommendations by the Australian Law Reform Commission (ALRC) in its 1995 report on Costs Shifting – Who Pays for Litigation. Tellingly, the referral to the ALRC arose from a recommendation in the Access to Justice Advisory Committee’s report published the previous year titled Access to Justice: An Action Plan highlighting the importance of costs in access to justice generally. ALRC Recommendation 11 related specifically to judicial review proceedings and suggested that costs should follow the event (that is the unsuccessful party pays the costs of the successful party) subject to the court determining that such an order would materially and adversely affect the ability of a party to present his or her case properly or negotiate a fair settlement. Additionally, ALRC recommendation 45 suggested that courts and tribunals make a public interest costs order where it was satisfied that:
- the proceedings will determine, enforce or clarify an important right or obligation affecting the community or a significant sector of the community; or
- the proceedings will affect the development of the law generally and may reduce the need for further litigation; or
- the proceedings otherwise have the character of public interest or test case proceedings.
However, the ALRC did not agree that there should be a broader reform of the general rule that costs follow the event as many judicial review proceedings were of personal or commercial matters and thus were appropriately treated in the usual manner. According to the ALRC website “as yet there has been no direct implementation of the Commission’s recommendations in ALRC Report 75”.
In 2012 the Administrative Review Council issued Report 50 on Federal Judicial Review in Australia, which contained recommendation 15 on costs. It suggested that the judicial review statute, the ADJR Act, should be amended to provide that unless the court ordered otherwise, parties to judicial review proceedings should bear their own costs. This amendment has not yet been implemented. And finally in terms of reform proposals, in 2014 the Australian Productivity Commission in their Access to Justice Arrangements Report issued recommendation 13.6 to promote the use by courts of protective costs orders in public interest litigation (which they defined to include judicial review).
At an individual agency level, the Australian Taxation Office (ATO) has established a Test Case Litigation Program which provides financial assistance to taxpayers to help them meet some or all of their reasonable litigation costs for approved cases that have broader implications beyond the individual’s dispute with the ATO.
A legislative response to the issue of costs in judicial review
At a state level it is pertinent to consider the position in Queensland. There the issue of the negative impact on access to justice arising from adverse costs orders has been managed by the insertion of section 49 into the Judicial Review Act 1991 (Qld), based on the recommendations in the report on judicial review by the Electoral and Administrative Commission. It provides that the Queensland Supreme Court may make an order:
(1)(d) that another party to the review application indemnify the relevant applicant in relation to the costs properly incurred in the review application by the relevant applicant, on a party and party basis, from the time the costs application was made;
(1)(e) that a party to the review application is to bear only that party’s own costs of the proceeding, regardless of the outcome of the proceeding.
Costs orders are generally considered to be an inherent power of superior courts in Australia (usually dealt with in the Rules applying to and issued by the Court itself) but the Queensland statutory provision provides a clear and express indication of Parliament’s intent that courts should exercise their powers in a judicial review application in a manner which enhances access to justice rather than impedes it. Two options are provided – either an order to indemnify the costs or alternatively, and I would argue generally preferably, an order that each party bears their own costs.
Section 49(2) then enumerates factors which the Court is to have regard, paraphrasing these are financial resources, whether the proceeding involves an issue that affects, or may affect, the public interest, and if the proceeding discloses a reasonable basis for the review application and whether the case can be supported on a reasonable basis.
Section 49 does not operate automatically and must be the subject of a specific application to the court by a party to the judicial review proceedings. Sadly, it is not a well-known provision and does not receive the academic recognition it deserves. Nor does it receive much attention and use from parties to judicial review proceedings in Queensland. The Austlii database records only 74 Queensland cases where this provision has been cited in the period since 1991 to the present. A prominent case to consider the provision in detail was Anghel v Minister for Transport (No 2)  QCA 232 (28 June 1994). The Queensland Court of Appeal considered the nature of the power and the factors in section 49(2). Fitzgerald P explained that making a costs order pursuant to section 49(1)(e):
…will be less likely to deter private citizens from challenging government decisions which affect them, and thus advance the general intent of the Act that persons aggrieved should have a practical means of calling such decisions into question”.
Ultimately the Queensland Court of Appeal ordered that costs would lie where they fell (that is each party would bear their own costs) and overturned the first instance judge’s costs order that the Minister should pay costs.
Another example of a case where the court granted a costs order under section 49(1)(e) requiring each party bear their own costs was Alliance to Save Hinchinbrook Inc v Cook (as Delegate of the Chief Executive, Environmental Protection Agency)  QSC 355 (1 December 2005). This case was significant as the court was satisfied that all elements of section 49(1)(e) were fulfilled and made the costs order “regardless of the outcome of those proceedings” which at that point were yet to be determined.
Despite the promising application of section 49(1)(e) powers in Anghel & Alliance, there has not been more widespread instances of its use. More recently, in Calanca v The Queensland Parole Board  QSC 3 (8 January 2016), Weston v The Central & Northern Queensland Regional Parole Board  QSC 10 (8 February 2016), Day v Queensland Parole Board  QSC 11 (8 February 2016) and Finn v Central and Northern Queensland Regional Parole Board  QSC 233 (23 September 2016) the applicants were all ordered to pay the respondents costs following an unsuccessful application for judicial review. What is striking about the Weston and Day cases is that in each the applicant was a prisoner who was self‑representing. It is questionable as to the purpose served by imposing a costs order on a current prisoner. No consideration was given in the judgments as to the public law values underpinning the debate around costs orders, rather the order was made without explanation. It may be that the judges had in mind the personal (rather than public) nature of the judicial review application and found it did not meet the requirements for the exercise of discretion on the point of costs or that the matter was assessed to be frivolous/vexatious. Sadly, the reasons for imposing the costs orders were not articulated in these cases.
Merits review and access to justice
Leaving judicial review, there is much to be said for the Australian initiative of a centralised merits review tribunal in improving access to justice. The origins of the Australian Tribunal system date from the recommendations of three seminal Committees established by the Australian Government, which issued reports over the period 1968 – 1973. The first was the Commonwealth Administrative Review Committee (usually referred to as the “Kerr Committee”) which in 1971 produced a report containing recommendations which would fundamentally alter the Australian administrative law institutional landscape. Subsequently, the Committee on Administrative Discretions (usually referred to as the “Bland Committee”) and the Committee of Review on Prerogative Writ Procedures (usually referred to as the Ellicott Committee”) refined aspects of the earlier Kerr Committee report. The ultimate combined effect of the reports was the establishment of a new Australian merits review tribunal – the Administrative Appeals Tribunal (AAT).
The AAT was designed to provide individuals with a mechanism for review on the merits of the matter as ‘this is usually what the aggrieved citizen is seeking’. Whilst review tribunals had existed in many forms but usually in a discrete jurisdiction (such as dust diseases), the Kerr Committee’s Report provided the foundation for a general recognition and acceptance of the role a centralised tribunal could play in Australia’s administrative justice landscape.
The creation of the AAT has been described by Professor Pearce a renowned authority on the topic of federal administrative tribunals as:
one of the most innovative steps ever taken to provide citizens with a means of review of the merits of a decision taken by a government agency.
The AAT can review decisions made under more than 400 federal Acts and legislative instruments. The impact of the AAT can best be seen through the volume of applications it receives in a year. The latest figures record it finalised 40,669 applications in the period 2015-2016. Furthermore, less than five per cent of all decisions that have been made by the AAT are set aside on judicial review. By any standard this is a significant and substantial contribution to the ability of the public to receive reviews of government decisions.
Costs orders are not the norm in the AAT, however there are some distinct exceptions where the AAT does have power to make cost orders: under section 69B of the Administrative Appeals Tribunal Act 1975 (Cth) the AAT Act) in relation to reviews of adverse or qualified security assessments, section 357 of the Military Rehabilitation and Compensation Act 2004 (Cth), section 67 of the Safety, Rehabilitation and Compensation Act 1988 (Cth), section 92 of the Seafarers Rehabilitation and Compensation Act 1992 (Cth), section 66 of the Freedom of Information Act 1982 (Cth), section 35 of the Mutual Recognition Act 1992 (Cth) and section 131 of the Land Acquisition Act 1989 (Cth). The AAT issued a Practice Direction (made under subsections 18B(1) of the AAT Act) with effect from 1 July 2015, titled “Taxation of Costs”, which details the procedure to be followed in circumstances where parties were unable to agree upon costs between themselves. Such costs are assessed on a party and party basis.
At the State level the situation is more nuanced reflecting the diversity of jurisdiction exercised in State tribunals (covering both civil and administrative matters). For example, the Victorian Civil and Administrative Tribunal (VCAT) claims to be the busiest tribunal in Australia exercising both original and review powers and finalising more than 85,000 cases per year. VCAT has a statutory power to award costs under section 109 of VCAT Act 1998 (Vic), which is prescriptive in its terms. In VCAT the general rule is that costs are not awarded and each party bears their own costs. Section 109(2) then empowers VCAT to order a [arty pay all or part of the costs of another party. A test is specified in section 109(3) which states that costs should only be awarded if VCAT is satisfied that it is “fair to do so”. VCAT can then exercise its discretion contrary to the general position. Costs are assessed on the individual facts in the matter. Notably though, VCAT cannot award costs in proceedings concerning “small claims”.
Whilst judicial review remains a crucial element of the Australian administrative justice system, there has developed acceptance and recognition that access to justice is best served by a complex and complimentary system of institutions each with a unique role. Judicial supporters of the existence of choice via diverse institutions and complementary mechanisms (for example Freedom of Information) within the Australian administrative law landscape include former High Court Chief Justice Sir Anthony Mason who wrote:
[a]dministrative justice is now as important to the citizen as traditional justice at the hands of the orthodox court system.
The material analysed above leads to the conclusion that access to justice is enhanced through the operation of the merits review system in Australia and in particular by the general approach taken by the AAT as to the issue of costs. Initiatives at a State level to confer statutory powers on superior courts conducting judicial review that enhance discretion to adopt a context-based, individual approach in respect of costs are to be encouraged. Similar refinements could be adopted more broadly throughout the entire administrative justice system. This would ensure that Australia’s commitment to the principles upheld by administrative law and access to justice does not descend to the point of being labelled a disgrace due to a barrier constructed by adverse costs orders.
Narelle Bedford is an Assistant Professor in the Faculty of Law, Bond University Australia where she lectures in Administrative Law. She is also a part-time doctoral researcher at the University of New South Wales. She is grateful to her PhD supervisor, Dr Greg Weeks, for his encouragement to prepare this piece and for his comments.
(Suggested citation: N. Bedford, ‘Public Law, No Disgrace in Australia but Room for Improvements’, U.K. Const. L. Blog (15th Feb 2017) (available at https://ukconstitutionallaw.org/)