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Federal Court judgments

Federal Court judgments

By Dan Star QC

Courts Judgment 

Administrative law The penalty privilege – whether available in AAT proceedings In Migration Agents Registration Authority v Frugtniet [2018] FCAFC 5 (30 January 2018), the Full Court considered whether the privilege against exposure to a penalty (penalty privilege) was available to a respondent in his Administrative Appeals Tribunal (AAT) proceedings. In an AAT review, the conference registrar made procedural directions including that Mr Frugtniet give the AAT and the Migration Agents Registration Authority (MARA) witness statements, documents and a statement of facts, issues and contentions. A deputy president rejected Mr Frugtniet’s objection to these orders on the basis of the penalty privilege. The deputy president also affirmed the decision of the MARA to cancel Mr Frugtniet’s registration as a migration agent. Mr Frugtniet successfully appealed to the Federal Court (see [2017] FCA 537). The primary judge (Kenny J) overturned the deputy president’s final decision on the basis that the penalty privilege was available to Mr Frugtniet in the AAT. The primary judge also found that the possibility of a different outcome, had the penalty privilege claim been upheld, could not be excluded. The MARA’s appeal to the Full Court was successful. Siopsis, Robertson and Bromwich JJ held that the primary judge erred in concluding that the penalty privilege applied to Mr Frugtniet’s AAT proceedings. The outcome of the appeal turned on the interpretation of High Court authority (relevantly, Sorby v Commonwealth (1983) 152 CLR 281, Pyneboard Pty Ltd v TPC (1983) 152 CLR 328, Police Service Board v Morris (1985) 156 CLR 397, Daniels Corporation International Pty Ltd v ACCC (2002) 213 CLR 543 and Rich v ASIC (2004) 220 CLR 129): at [6]-[44]. Having reconciled those authorities, the Full Court concluded (at [53]) that the “penalty privilege is not even a substantive rule of law of a kind that must be found not to apply or be abrogated in a non-curial setting, but, rather, a protection that must have a foundation for applying in the first place as a matter of statutory construction. In this case, that requires consideration of the relevant provisions of the Migration Act 1958 (Cth) and the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act).” The Full Court explained the distinction between the privilege against self-incrimination and the penalty privilege at [77]: “Following Sorby, the starting point for the privilege against self-incrimination is that it exists and applies unless abrogated. However, that is not the starting point for penalty privilege, which is not, following Daniels and Rich, a substantive rule of law, let alone an important and fundamental common law immunity, having, as it does, a very different origin and history. In each setting where penalty privilege is claimed, the opening question is whether that privilege applies in the first place, not whether it has been abrogated . . .” The Full Court held there was nothing in the relevant provisions of the Migration Act or the AAT Act to support the conclusion that the penalty privilege applied to Mr Frugtniet’s proceedings before the AAT (at [82]). The Full Court emphasised that its decision was limited to the application of the penalty privilege to the AAT proceedings and excluded consideration of non-federal intermediate appeal courts’ decisions that dealt with the issue in the context of non-federal tribunals, which it said had a very different legislative and constitutional context (at [7], also [74]). Note: Mr Frugtniet has sought special leave to appeal to the High Court of Australia. Costs Lump sum costs orders The Federal Court is encouraging of lump sum costs orders instead of taxation of costs. So much is apparent from the Court’s practice notes: see Court Practice Note: National Court Framework and Case Management (CPN-1) at [17] and the Costs Practice Note (GPN COSTS) (Costs Practice Note). Indeed the Costs Practice Note states at [4.1] that other than for interlocutory orders “the Court’s preference, wherever it is practicable and appropriate to do so, is for the making of a lump-sum costs order”. There are now many judgments that allow or reject the making of lump sum costs orders in the exercise of the Court’s broad discretion on costs in the circumstances of the case. Although there is often no or limited utility in focusing on the result of other costs judgments, it can be helpful to see the Court’s general approach. In GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser (Australia) Pty Limited (No 3) [2018] FCA 183 (28 February 2018) Foster J declined to make a lump sum costs order. The Court usefully summarised the key principles for consideration in determining whether to make a lump sum costs order (at [54]-[65]). The leading Full Court guidance on lump sum costs orders is Paciocco v Australia and New Zealand Banking Group Ltd (No 2) [2017] FCAFC 146 at [13]-[20] (Allsop CJ, Besanko and Middleton JJ). Industrial law The right of entry regime – the “act in an improper manner” test in s500 of the Fair Work Act 2009 (Cth) In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Castlemaine Police Station Case) [2018] FCAFC 15 (12 February 2018) the Court allowed the regulator’s appeal which principally concerned the meaning of the requirement in s500 of the Fair Work Act 2009 (Cth) (FW Act) that a permit holder not “act in an improper manner”. Mr Tadic, an organiser of the union who held an entry permit under Part 3-4 of the FW Act, inspected a construction site with a colleague (also a permit holder), the site manager and a WorkSafe Victoria inspector appointed under the Occupational Health and Safety Act 2004 (Vic). The proceedings concerned whether Mr Tadic had acted in an improper manner by his conduct during the inspection with the WorkSafe inspector. The Full Court overturned the primary judge’s decision and made a declaration that Mr Tadic had acted in an “improper manner” within the meaning of s500 of the FW Act by his conduct with the WorkSafe inspector. The Full Court addressed at [38]-[41] the key principles for determining the assessment of propriety (in particular, the established test from R v Byrnes & Hopwood (1995) 183 CLR 501 at 514-515). Dowsett, Tracey and Charlesworth JJ rejected an argument by the respondents that a permit holder would only contravene the “improper manner” limb of s500 if the impugned act had a practical and adverse impact on the performance of the inspector’s statutory duties (at [31] and [48]). The Full Court explained (at [49]) “. . . The determination of whether somebody has acted in an improper manner by making statements of the kind which Mr Tadic did cannot depend on the reaction of the person or persons to whom the action is directed. Possible reactions would range from complete capitulation to overbearing conduct on the one hand, to unconcern and dismissiveness on the other”. The Full Court dismissed other grounds of appeal to the effect that the trial judge denied procedural fairness to the Commissioner by certain adverse findings in the judgment about the Commissioner’s conduct in the course of a compulsory examination of the WorkSafe inspector (see [35]-[36] and [57]-[85]). The proceeding was nonetheless remitted to a different single judge to determine the question of penalty following the declared contravention of s500 of the FW Act. Dan Star QC is a barrister at the Victorian Bar, ph 9225 8757 or email The full version of these judgments can be found at Numbers in square brackets refer to paragraph numbers in the judgment.

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