Acohs Pty Ltd v Ucorp Pty Ltd (No 4) - [2010] FCA 956

FEDERAL COURT OF AUSTRALIA
Acohs Pty Ltd v Ucorp Pty Ltd (No 4) [2010] FCA 956

Citation: Acohs Pty Ltd v Ucorp Pty Ltd (No 4) [2010] FCA 956

Parties: ACOHS PTY LTD (ACN 009 572 187) v UCORP PTY LTD (ACN 062 768 094) and BERNARD BIALKOWER

File number: VID 873 of 2004

Judge: JESSUP J

Date of judgment: 2 September 2010

Catchwords:
PRACTICE AND PROCEDURE – Costs – Indemnity costs – Offer of compromise – Whether rejection of offer of compromise by applicant entitled respondents to award of indemnity costs – Whether applicant acted unreasonably

PRACTICE AND PROCEDURE – Costs – Indemnity costs – Whether applicant advanced case in wilful disregard of known facts and established law – Whether applicant prosecuted case for ulterior motive

PRACTICE AND PROCEDURE – Costs – Indemnity costs – Whether applicant made or persisted with hopelessly weak claims – Whether the fact applicant persisted with claims to trial, but did not prosecute them, entitled respondent to indemnity costs

PRACTICE AND PROCEDURE – Undertakings as to damages – Whether respondents entitled to compensation for damage suffered as a result of complying with undertakings and order – Whether compensation claimed by respondents was attributable to work required to be done in compliance with the undertakings and order

Legislation: Federal Court Rules O 11, 23

Cases cited:
Acohs Pty Ltd v RA Bashford Consulting Pty Ltd (1997) 144 ALR 528
Acohs Pty Ltd v Ucorp Pty Ltd (No 2) (2009) 82 IPR 493 Peet Ltd v Richmond [2009] VSC 585

CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (2002) 190 ALR 121

Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
Ragata Developments Pty Ltd v Westpac Banking Corporation (1993) 217 ALR 175
Seven Network Ltd v News Limited (2009) 262 ALR 160 Yates Property Corporation Pty Ltd v Boland (No 2) (1997) 147 ALR 685

Date of hearing: 3 August 2010

Place: Melbourne

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 52

Counsel for the Applicant: Mr J Burnside QC with Mr G Dalton

Solicitor for the Applicant: Serry White & Co

Counsel for the Respondents: Mr R Garratt QC with Mr P Wallis and Mr S Rebikoff

Solicitor for the Respondents: Holding Redlich

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 873 of 2004

BETWEEN:
ACOHS PTY LTD (ACN 009 572 187)
Applicant

AND:
UCORP PTY LTD (ACN 062 768 094)
First Respondent

BERNARD BIALKOWER
Second Respondent

JUDGE:

JESSUP J

DATE OF ORDER:

2 SEPTEMBER 2010

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.Of the respondents’ costs referred to in Order 2 made on 10 June 2010, those that were incurred only in resisting the applicant’s claim that the source code for an electronic document in PDF format was an original work in which the applicant owned the copyright, or the applicant’s claim that any such work…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] FCA 956
Decision Date: 2 September 2010

CaseChat Overview and Summary

Acohs Pty Ltd brought an action against Ucorp Pty Ltd concerning claims related to copyright in electronic documents. The dispute was heard and determined by the Federal Court of Australia. The court was required to decide several issues regarding indemnity costs and compensation for loss and damage incurred by the respondents due to complying with certain undertakings and orders.

The primary legal issue was whether the respondents were entitled to indemnity costs for the costs incurred in resisting specific claims made by the applicant. Additionally, the court had to determine if the applicant's conduct in advancing its case constituted a wilful disregard of known facts and established law, or if the case was prosecuted for ulterior motives. Another issue was whether the applicant's persistence with weak claims entitled the respondents to indemnity costs despite not prosecuting them.

The court ruled that the respondents were entitled to indemnity costs for the costs incurred in resisting the applicant's claims concerning the copyright in the source code for an electronic document in PDF format and the reproduction of such work. However, the court dismissed the respondents' broader claim for indemnity costs. The court found that the applicant's rejection of a compromise offer was not a ground for awarding indemnity costs to the respondents. Furthermore, the court did not find the applicant's conduct to be unreasonable or motivated by ulterior motives. The court held that the applicant's persistence with claims to trial, despite their weakness, did not warrant indemnity costs.

In addition to the indemnity costs, the court ordered the applicant to compensate the first respondent for the loss and damage suffered due to complying with certain undertakings and orders. The court also excused the respondents from further compliance with specified orders.

Orders

Orders of the court

1. Of the respondents’ costs referred to in Order 2 made on 10 June 2010, those that were incurred only in resisting the applicant’s claim that the source code for an electronic document in PDF format was an original work in which the applicant owned the copyright, or the applicant’s claim that any such work had been reproduced by the respondents, be taxed on an indemnity basis.

2. Save as aforesaid, the respondents’ claim to have their costs taxed on an indemnity basis be dismissed.

3. Within 28 days, the applicant pay the first respondent the sum of $38,322.84 by way of compensation for the loss and damage suffered by it by reason of the operation of the interlocutory undertaking given by it on 3 September 2004 and 16 October 2006 and of the interlocutory injunction made on 3 June 2009.

4. The respondents be excused from further compliance with the following orders of the Court:

(a) Order 2 made on 29 March 2006;

(b) Order 6 made on 3 June 2009; and

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citation:		Acohs Pty Ltd v Ucorp Pty Ltd (No 4) [2010] FCA 956
Parties:		ACOHS PTY LTD (ACN 009 572 187) v UCORP PTY LTD (ACN 062 768 094) and BERNARD BIALKOWER
File number:		VID 873 of 2004
Judge:		JESSUP J
Date of judgment:		2 September 2010
Catchwords:		PRACTICE AND PROCEDURE – Costs – Indemnity costs – Offer of compromise – Whether rejection of offer of compromise by applicant entitled respondents to award of indemnity costs – Whether applicant acted unreasonably PRACTICE AND PROCEDURE – Costs – Indemnity costs – Whether applicant advanced case in wilful disregard of known facts and established law – Whether applicant prosecuted case for ulterior motive PRACTICE AND PROCEDURE – Costs – Indemnity costs – Whether applicant made or persisted with hopelessly weak claims – Whether the fact applicant persisted with claims to trial, but did not prosecute them, entitled respondent to indemnity costs PRACTICE AND PROCEDURE – Undertakings as to damages – Whether respondents entitled to compensation for damage suffered as a result of complying with undertakings and order – Whether compensation claimed by respondents was attributable to work required to be done in compliance with the undertakings and order
Legislation:		Federal Court Rules O 11, 23
Cases cited:		Acohs Pty Ltd v RA Bashford Consulting Pty Ltd (1997) 144 ALR 528 Acohs Pty Ltd v Ucorp Pty Ltd (No 2) (2009) 82 IPR 493 Peet Ltd v Richmond [2009] VSC 585 CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (2002) 190 ALR 121 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 Ragata Developments Pty Ltd v Westpac Banking Corporation (1993) 217 ALR 175 Seven Network Ltd v News Limited (2009) 262 ALR 160 Yates Property Corporation Pty Ltd v Boland (No 2) (1997) 147 ALR 685
Date of hearing:	3 August 2010
Place:	Melbourne
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	52
Counsel for the Applicant:	Mr J Burnside QC with Mr G Dalton
Solicitor for the Applicant:	Serry White & Co
Counsel for the Respondents:	Mr R Garratt QC with Mr P Wallis and Mr S Rebikoff
Solicitor for the Respondents:	Holding Redlich

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION		VID 873 of 2004
BETWEEN:	ACOHS PTY LTD (ACN 009 572 187) Applicant
AND:	UCORP PTY LTD (ACN 062 768 094) First Respondent BERNARD BIALKOWER Second Respondent
JUDGE:	JESSUP J
DATE OF ORDER:	2 SEPTEMBER 2010
WHERE MADE:	MELBOURNE