Detaining refugees inside hotels with limited fresh air and sunlight lacks humanity and human decency but is not unlawful, a judge has ruled.
Activists have slammed the decision and called for legislative change, saying Australia's immigration detention regime is a "global embarrassment".
Mostafa "Moz" Azimitabar, a Kurdish Iranian refugee, launched legal action against the federal government last year after being detained inside two Melbourne hotels for 14 months.
He tried to arrive in Australia by boat in 2013 and was detained on Christmas Island before being brought to the mainland in November 2019 to receive medical treatment.
Instead of being transferred for treatment, he was detained at the Mantra Hotel for 13 months and the Park Hotel for one month, before being released on a bridging visa in January 2021.
He suffered from asthma, PTSD and depression but was kept in hotel rooms with windows that would only open by 10cm, often without access to an outdoor space.
Mr Azimitabar argued his detention and the Commonwealth's expenditure to keep him at the hotels was unlawful, and not permitted under the government's executive powers.
But Justice Bernard Murphy dismissed the landmark case on Thursday, a decision that will have wider ramifications for thousands of other refugees and asylum seekers.
He ruled the immigration minister has the power to approve of hotels being used as temporary detention centres.
In handing down his decision, Judge Murphy took the unusual step of stating that his finding should not be taken as an approval of hotels being used as makeshift detention centres.
He said hotel detention, with limited access to fresh air or sunlight, lacked thought, care and humanity.
"As a matter of ordinary human decency the applicant should not have been detained for such a period in those conditions, particularly when he was suffering from PTSD and a major depressive episode," he said.
Mr Azimitabar was supported in court by his friend, activist Grace Tame, who hugged him and cried after the ruling.
He said he was proud to have brought the legal action and hoped it could lead to a change in federal law.
"It's not OK for someone who is suffering from asthma, from PTSD, to be locked up in a room, but it's legal that a minister opens a building and puts sick people inside a hotel and uses it as a prison," he said outside court.
Amnesty International national director Samantha Klintworth called on the government to pass legislation that would make continued use of hotels as detention centres unlawful.
"The Australian immigration detention and offshore processing regime is a global embarrassment," she said.
"It is cruel, it is inhumane and we simply must do better."
Mr Azimitabar's lawyer Michael Bradley said he will look closely at the judge's reasons before deciding whether to appeal to the Full Court of the Federal Court or the High Court.
"We're disappointed by the legal outcome and we will consider our appeal rights," he said.
"However, we take heart from the judge's comments and his recognition of the basic inhumanity of this system."
The judge indicated Mr Azimitabar will likely have to pay for the legal costs, but Mr Bradley will argue he brought the case in the public interest and ought not to be punished financially.
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