Australian Mud Company Pty Ltd v Coretell Pty Ltd (No 4)

The matter before the court involved an interlocutory application by Coretell Pty Ltd (the respondents) against Australian Mud Company Pty Ltd (the applicants) to vary certain costs orders made in December 2010. The applicants had previously been involved in a patent infringement case with the respondents, which included claims of unjustified threats and a cross-claim for revocation of the patent for invalidity. The December 2010 orders had directed that certain costs be paid immediately, while others were to be taxed at the conclusion of the proceeding. The respondents sought to have the costs, which had not been taxed, paid forthwith.

The legal issues for the court to determine included whether the costs orders in question were interlocutory orders under the Federal Court Rules, and if so, whether the general rule that such costs should not be taxed until the conclusion of the proceeding should be departed from in this case. The respondents argued that the costs orders were not interlocutory and thus could be taxed immediately, while the applicants contended that the orders fell within the scope of the rule and should not be taxed until the proceeding was concluded.

The court found that the costs orders in question were not interlocutory orders as they related to the applicants' amended application and the respondents' further amended cross-claim, rather than an interlocutory application. The court also noted that the policy reasons supporting the general rule did not apply in this case, as the issues of liability had been finally determined. The court held that it was appropriate to exercise its discretion to order that the costs be taxed and paid forthwith, as it would not encourage interlocutory applications or result in a series of taxations. The proceeding would continue to a hearing on quantum of relief, after which a second taxation of costs may occur if necessary.

The court made orders varying orders 6, 7, and 8 of the December 2010 orders to allow for the immediate taxation and payment of the costs in question. Additionally, the applicants were ordered to pay the respondents' costs of the interlocutory application.