Australia: The model litigant policy in the spotlight

Last Updated: 2 September 2011
Article by Ashley Tsacalos

The obligation for government agencies to act as a model litigant has received some recent attention.  Recently, the Attorney-General, the Hon. Robert McClelland stated that 'any breach of the model litigant obligation would be unacceptable as the Australian Government is committed to achieving the highest professional standards in its handling of claims and litigation'.

These remarks were welcomed by the Rule of Law Institute of Australia who stated in a media release that 'it is important that the message come from the highest levels of government that the Crown must behave as a model litigant when investigating and taking legal action against its citizens'.  The Rule of Law Institute of Australia has called for the Federal Government to immediately commission an independent agency to conduct a thorough and consultative review of both the rules for behaving as a model litigant and their administration.

The Attorney-General has indicated that the Legal Services Directions are currently under review.  However, he did not comment further on the decision from the NSW Court of Appeal in Morley & Ors v Australian Securities and Investments Commission [2010] NSWCA 331 in light of the fact that it is currently the subject of an appeal before the High Court.  In this case, there was a discussion of government agencies owing an obligation of fairness to other parties involved in litigation.  This has also been incorporated into their obligation to act as model litigants.  The High Court's approach to this issue will be of great interest to those handling claims and conducting litigation on behalf of any government agency.

Issues in relation to the application of the model litigant policy have arisen in a number of recent cases.  In Deputy Commissioner of Taxation v Clear Blue Developments Pty Ltd (No. 2) [2010] FCA 1224, Justice Logan stated, in response to a request from the Deputy Commissioner of Taxation for an order as to costs, that 'I do not propose to award professional costs to the Deputy Commissioner. Indeed, so to do would be to reward work which is not of a standard to be expected of a person to be solicitor on the record for a person to whom the model litigant obligations adhere'. In Phillips, in the matter of Starrs & Co Pty Limited (In Liquidation) v Commissioner of Taxation [2011] FCA 532, Justice Lander was critical of the failure of the Commissioner of Taxation to file an affidavit within the time required.  The ATO had sought 3 extensions from the Court to file an affidavit and the Court ordered that the ATO pay the applicant's costs on an indemnity basis.  Justice Lander stated (at [3]):

The Commissioner of Taxation is a model litigant and ought to behave as one. The direction of the Court was that the Commissioner file an affidavit within six weeks of the date of the direction.  Directions of this Court, of course, have the force of orders. Orders of this Court must be complied with, especially when the party who is obliged to comply is a model litigant.

For a further discussion on other recent cases involving the model litigant obligations please click here and here.

It is clear that the obligations upon government agencies when handling claims and conducting litigation are higher than for ordinary citizens.  There is an expectation that government agencies act fairly and properly.  In addition, courts expect that government agencies will comply with court orders.  This expectation arises as a result of the resources available to government such that courts expect that a government agency ought to be able to comply with court orders or urgent interlocutory applications, for example, urgent High Court injunction applications arising from the asylum seeker agreement with Malaysia (Shah & Ors v Minister for Immigration and Citizenship & Anor [2011] HCATrans 196 (8 August 2011)).  The application for an urgent injunction to restrain the removal of 16 individuals from Australia (who are to be sent to Malaysia) commenced on Sunday 7 August 2011.  When the matter resumed the following day, the Solicitor-General Mr Stephen Gageler SC was asked by Justice Hayne about the availability of an affidavit.  The exchange proceeded as follows:

HIS HONOUR: Before you proceed further, how long is this affidavit going to take, Mr Solicitor?  It is unsatisfactory that the matter proceed in this half-baked fashion.

MR GAGELER: Within the next 20 minutes, your Honour.

HIS HONOUR: If you are going to address argument on the footing of material that has not been heard or dealt with, what am I to do?

MR GAGELER: Your Honour has my assurance that the material will be before the Court this afternoon.

HIS HONOUR: When is the other party to have notice of its content and an opportunity to consider it and consider the course they should take in response to it?

MR GAGELER: Your Honour, we are responding to an urgent interlocutory injunction and we are - - -

HIS HONOUR: I understand that, Mr Solicitor, and you have the whole of the resources of the Commonwealth behind you.

The above exchange demonstrates the relatively unsympathetic view courts have in relation to the ability of government agencies to comply with court orders or respond to, and prepare for, urgent interlocutory applications in light of the fact that they are considered to have access to significant resources.  This also demonstrates that even in urgent applications, a court expects a government agency to be able to meet whatever case or application is made against it irrespective of the limited time available to do so.

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Ashley Tsacalos
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