An overview of the Commonwealth’s model litigant obligation

Key Takeaways

• The model litigant obligation arises under both the common law and the Legal Services Directions 2017 (Cth) (Directions). The scope of the common law model litigant obligation is broader than the scope of the model litigant obligation under the Directions.
• The model litigant obligation requires the Commonwealth to act with complete propriety, fairly and in accordance with the highest professional standards. This goes beyond the ethical duties expected of all legal practitioners. However, the model litigant obligation does not prevent the Commonwealth from:
  • Acting firmly and properly to protect its interests, including in pursuing claims, and in testing or defending claims made against it
  • Enforcing cost orders
  • Seeking to recover costs
• Non-compliance with the model litigant obligation can have significant reputational implications for the Commonwealth and its legal service providers.

Commonwealth model litigant obligation in a nutshell

Since the early 20th century, Australian courts have emphasised the obligation for the Commonwealth to act as a ‘model litigant’ in court proceedings. In addition to the common law, the Directions¹ require the Commonwealth to handle claims and conduct litigation in accordance with The Commonwealth’s Obligation to Act as a Model Litigant as set out at Appendix B of the Directions.² The model litigant obligation, articulated in Appendix B of the Directions, requires the Commonwealth to act honestly and fairly in handling claims and litigation (including before courts, tribunals, inquiries and in arbitration and other alternative dispute resolution processes).³

Who must comply with the model litigant obligation?

Under the Directions, the Commonwealth agency with responsibility for the litigation has the primary responsibility for ensuring compliance with the model litigant obligation. The lawyers acting for the Commonwealth are required to act in accordance with the model litigant obligation, and also to assist their client agency to do so.

What does the model litigant obligation entail?

The model litigant obligation requires the Commonwealth to act with complete propriety, fairly and in accordance with the highest professional standards. This goes beyond the ethical duties expected of all legal practitioners. .

Paragraphs 2(a) through (i) of Appendix B of the Directions outline that the Commonwealth ought to:

• Deal with claims promptly and without unnecessary delay.
• Make early assessments of the Commonwealth’s prospects of success and potential liability.
• Pay legitimate claims without litigation.
• Act consistently in the handling of claims and litigation.
• Endeavour to avoid, prevent, and limit the scope of legal proceedings wherever possible.
• Where avoiding litigation is not possible, keeping costs of litigation to a minimum.
• Not take advantage of a claimant who lacks resources to litigate a legitimate claim.
• Not rely on technical defences unless the Commonwealth’s interests would be prejudiced by the failure to comply with a particular requirement.
• Not undertake and pursue appeals unless the Commonwealth believes that it has reasonable prospects for success, or the appeal is otherwise justified in public interest.
• Apologise where the Commonwealth is aware that it or its lawyers have acted wrongfully or improperly.

Alongside these expectations, common law has suggested that the model litigant obligation is ‘broader and more fundamental’ encompassing fairness in all aspects of litigation.⁴

However, the model litigant obligation does not prevent the Commonwealth from:

• Acting firmly and properly to protect its interests, including in pursuing claims, and in testing or defending claims made against it
• Enforcing cost orders
• Seeking to recover costs

The origin of the model litigant obligation

Judicial pronouncement

Griffith CJ observed in Melbourne Steamship Co Ltd v Moorehead:⁵

‘The point is a purely technical point of pleading, and I cannot refrain from expressing my surprise that it should be taken on behalf of the Crown. It used to be regarded as axiomatic that the Crown never takes technical points, even in civil proceedings, and a fortiori not in criminal proceedings.

I am sometimes inclined to think that in some parts–not all–of the Commonwealth, the old-fashioned traditional, and almost instinctive, standard of fair play to be observed by the Crown in dealing with subjects, which I learned a very long time ago to regard as elementary, is either not known or thought out of date. I should be glad to think that I am mistaken.’

Melbourne Steamship Co Ltd v Moorehead is considered the foremost judicial recognition of the model litigant obligation, and has since been cited in other High Court decisions,⁶ and Federal Court of Australia Full Court decisions.⁷

Underlying principles justifying the model litigant obligation

The principles underlying the common law basis for the model litigant obligation are:

• The Executive’s obligation to justice and the rule of law.
• The government’s obligation to uphold public trust and act in the public interest.
• Minimising the government’s litigation advantage over opponents (due to its size and resources).⁸

The model litigant obligation has maintained relevance for legal practitioners as it reflects several important principles for the Commonwealth as a public body. Firstly, the Crown has no legitimate private interest in how it performs its functions. It is expected to serve only the public interest, to uphold the rule of law and to assist the judiciary in achieving justice.

The model litigant obligation is often also justified as mitigating any potential litigation advantage enjoyed by the Commonwealth, as a repeat player in the justice system with extensive resources, particularly when the other party is a self-represented litigant. However, it is increasingly the case that the Commonwealth is faced with well-equipped private opponents, such as multi-national corporations, with whom there is little difference in size, resources, and litigation experience.

Model litigant obligation under the Directions

The power for the Commonwealth Attorney-General to make legal services directions was introduced in 1999.⁹ The intention was to empower the Attorney-General to issue legal services directions, on subjects including ‘specifying the obligation that the Commonwealth should act as a model litigant and the content of this obligation.’¹⁰

The articulation of the model litigant obligation in the Directions now provides greater clarity and consistency for legal practitioners representing the Commonwealth.

Can the model litigant obligation be enforced?

Under the Directions

The Attorney-General may impose sanctions for non-compliance with the Directions.¹¹

The accountable authority of a non-corporate Commonwealth entity is required to report to the Attorney-General or the Office of Legal Services Coordination (OLSC) on:

• Any possible or apparent breaches of the Directions (including in relation to model litigant obligation), or allegations of such breaches
• Any corrective steps that have been taken or are proposed to be taken¹²

This notification to OLSC is to be made using OLSC’s ‘Agency Notification Form’.¹³

Section 55ZG of the Judiciary Act states that the issue of non-compliance with the Directions may not be raised in any proceeding except by, or on behalf of the Commonwealth, and that compliance with a legal services direction is not enforceable except by, or upon the application of, the Attorney-General.

Under common law

However, the application of section 55ZG of the Judiciary Act, does ‘not prevent a Court from considering whether the Commonwealth has complied with the Court’s expectation at general law that the Commonwealth will, and will be seen to, act as a model litigant.’¹⁴ Mechanisms for enforcement of the model litigant obligation under common law may include the following:

Judicial Pronouncement

Departure from model litigant obligation standards may result in judicial criticism. Such criticism may negatively impact the reputation of both legal practitioners, and the Commonwealth at large.

A recent example of such criticism is that made by Logan J in Cheung v Commissioner of Taxation:¹⁵

‘[…] putting a taxpayer to proof on issues of fact and law which are truly not controversial is antithetical to the “traditional, and almost instinctive, standard of fair play to be observed by the Crown in dealing with subjects” to which Griffith CJ referred in Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333, at 342. That standard is not confined to taxation appeals but is pervasive in public administration. […]’

Stay Proceedings and Overturned Outcomes

In some cases, courts have found it appropriate to stay proceedings where failure to adhere to the model litigant obligation was found to cause unfairness.¹⁶

Failure to comply with the model litigant obligation may also impact the outcome of the matter. For example, in Environment Centre NT Inc v Minister for Resources and Water (No 2),¹⁷ Griffiths J found that the failure to comply with the common law model litigant obligation standard was relevant to the finding of jurisdictional error. Griffiths J considered at [211]:

‘Where the Commonwealth or one of its officers or agencies is under a statutory duty to act reasonably in the exercise of a discretionary power […], the failure to comply with common law model litigant standards may inform the Court’s assessment as to whether the exercise of that statutory power was unreasonable in a legal sense.’¹⁸

Informing the Award of Costs

There are examples of cases in which non-compliance with the model litigant obligation has informed the court’s discretion in making costs orders. For example, in Deputy Commissioner of Taxation v Clear Blue Developments Pty Ltd (No 2) Logan J concluded:

‘[…] 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 asserted to be solicitor on the record for a person to whom model litigant obligations adhere. […]’¹⁹

How has the model litigant obligation been applied and interpreted in recent cases?

Some key points relating to the application of the model litigant obligation in recent cases are outlined below.

Criticism of non-compliance

The Federal Court found that the Commonwealth should not require the other party to prove issues of fact and law that are not controversial: Cheung v Commissioner of Taxation [2024] FCA 1370, [26] (Logan J).

Courts praising compliance

In Brooks v Operator, National Redress Scheme for Institutional Child Sexual Abuse [2024] FCA 725, Logan J commended the adherence to the model litigant obligation demonstrated by the prompt lodgement of submissions conceding that the original determination was attended with jurisdictional error. Logan J stated at [13]:

‘“the old-fashioned, traditional and almost instinctive standard of fair play to be observed by the Crown in dealing with subjects”: Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333 at 342 per Griffith CJ Like Sir Samuel Griffith in 1912, I long ago learned to regard that obligation as “elementary”. Elementary though that standard, since termed a “model litigant obligation”, may be, that in no way diminishes my respectful commendation of the Operator (presently, Vice Admiral Raymond James Griggs, AO, CSC), and those advising him, for taking this course having formed this settled view. Especially given the revelations and recommendations concerning public administration in the report of the Royal Commission into the Robodebt Scheme, there is a singular public interest, in terms of public confidence in the integrity of administration of the Redress Scheme and encouragement of model litigant behaviour, in making this commendation explicit.’

Relating to enforcement of the model litigant obligation

The Full Court of the Federal Court found that compliance with the model litigant obligation is not a constraint on the exercise by the Administrative Appeals Tribunal of its powers, citing s 55ZG of the Judiciary Act: Minister for Immigration, Citizenship and Multicultural Affairs v NDBR [2024] FCAFC 114, [55]-[57] (Katzmann, Snaden and Raper JJ).

Allegations of non-compliance with the model litigant obligation not established

In Snow v Secretary, Dept of Social Security (Costs) [2024] FCA 1076, the applicant alleged that in pursuing costs, the Commonwealth acted contrary to its model litigant obligation by taking advantage of a self-represented party who lacked the resources to litigate a legitimate claim. O’Sullivan J found there was no legal or evidentiary merit to this submission: at [31]-[33]

While the following is a South Australian case, the underlying principles are also relevant in the Commonwealth context. In Brown v Department for Education [2023] SASCA 138, the applicant alleged that the respondent had breached its model litigant obligation. The appeal Court (Livesey P, Bleby JA and Stanley AJA) found that the breach was not established as the applicant did not provide a proper articulation of the obligation said to have been breached and of the utility of the complaint. The Court observed at [107]:

‘This Court takes the obligation of the Crown to act as a model litigant seriously. That is a function of the responsibilities of the Attorney-General as first law officer of the Crown. However, that does not mean that the cry of ‘model litigant’ can simply be deployed against a Crown agency to support a contention that it has some special procedural obligation, enforceable within the litigation.’ (citations omitted)

How should the model litigant obligation be applied?

The model litigant obligation reflects the broader duties expected of the Executive, and of government at large, in upholding justice and consistently acting in the public interest. The public interest is served by balancing acting fairly towards the other party with also acting firmly and properly to protect the Commonwealth’s interests, including in testing and defending claims.

When applying the model litigant obligation, practitioners should take care to adhere to the model litigant obligation requirements at paragraphs 2(a) through (i) of Appendix B of the Directions (as outlined above in this article).

Nonetheless, even though the Commonwealth must act as a model litigant, this does not mean that the Commonwealth cannot fully engage with the litigation process and take action to protect its interests. As Whitlam J opined in Brandon v Commonwealth of Australia [2005] FCA 109 at [11], the Commonwealth:

‘is not obliged to fight with one hand behind its back in proceedings. It has the same rights as any other litigant notwithstanding it assumes for itself, quite properly, the role of a model litigant.’