Beecham Group Plc v Colgate-Palmolive Pty Ltd

[2005] FCA 1005

FEDERAL COURT OF AUSTRALIA

Beecham Group PLC v Colgate-Palmolive Pty Ltd [2005] FCA 1005

BEECHAM GROUP PLC & ANOR v COLGATE-PALMOLIVE PTY LTD

NSD1425 OF 2004

EMMETT J
1 JULY 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD1425 OF 2004

BETWEEN:

BEECHAM GROUP PLC
FIRST APPLICANT

GLAXOSMITHKLINE AUSTRALIA PTY LTD
SECOND APPLICANT

AND:

COLGATE-PALMOLIVE PTY LTD
RESPONDENT

JUDGE:

EMMETT J

DATE OF ORDER:

1 JULY 2005

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.Rescinds the Orders made on 22 June 2005.

2.Orders that the application be dismissed.

3.Orders the Applicants to pay 85% of the Respondent’s costs of the proceedings save as to any costs already the subject of an existing costs order.

4.Grants leave to the Respondent to file, within 28 days of the date of these orders, a Notice of Motion seeking an enquiry as to damages sustained by reason of the injunction granted by Tamberlin J on 15 October 2004.

5.Notes the undertaking of the First and Second Applicants to the Court:

(a)to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of the interlocutory order in Order 6 of these orders or any continuation (with or without variation) thereof; and

(b)to pay compensation referred to in (a) to the person there referred to.

6.Orders that the Respondent, by itself, its servants or agents or otherwise, be restrained up to 4 pm on 29 July 2005, from:

(a)using or threatening to use the word “MAXCLEAN” in the manner in which it is used on the packaging a copy of which is “Attachment A” to the Application filed in these proceedings (the “MAXCLEAN toothbrush”), or in any manner which is similar to such use, in relation to the packaging, promotion, advertising, manufacture, distribution, offering for sale or sale of dental or oral hygiene products, including toothbrushes and toothpastes; and

(b)using or threatening to use the mark “MAXCLEAN” in relation to the packaging, promotion, advertising, manufacture, distribution, offering for sale or sale of dental or oral hygiene products, including toothbrushes and toothpastes; and

(c)using or threatening to use the trade marks listed below, or any mark which is substantially identical with or deceptively similar to those trade marks in relation to the packaging, promotion, advertising, manufacture, distribution, offering for sale or sale of dental or oral hygiene products, including toothbrushes and toothpastes:

(A)  Australian registered trade mark no. 774677 for MACLEANS; and

(B)  Australian registered trade mark no. 115973 for MACLEANS.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD1425 OF 2004

BETWEEN:

BEECHAM GROUP PLC

FIRST APPLICANT

GLAXOSMITHKLINE AUSTRALIA PTY LTD
SECOND APPLICANT

AND:

COLGATE-PALMOLIVE PTY LTD
RESPONDENT

JUDGE:

EMMETT J

DATE:

1 JULY 2005

PLACE:

SYDNEY

REASONS FOR JUDGMENT

1. On 22 June 2005, I published my reasons for concluding that the applicants would fail.  I made orders that the application be dismissed and that the applicants pay the respondent’s costs.  I was then asked to ensure that those orders not be entered because the applicants wished to make submissions concerning the order for costs.  I therefore directed that the orders not be entered until 4 July 2005.  Since then, the parties have made written submissions on the question of costs and brief oral submissions in reply on behalf of the applicants.

2. The discretion conferred by s 43(2) of the Federal Court of Australia Act 1976 (Cth) to make orders for the award of costs is unfettered except by the principle that it be exercised judicially. In the absence of special circumstances justifying some other order, costs ordinarily follow the event and a successful litigant is entitled to have its costs of the proceeding.

3. The applicants contended, however, that there are special circumstances in this case, arising from the respondent’s conduct of the proceeding that has occasioned unnecessary expense in the preparation of evidence for the hearing.  There are five aspects of the preparation and hearing in respect of which the applicants say the respondent has caused unnecessary costs to be incurred.  They are:

   1.The tender of large numbers of irrelevant documents.

   2.The preparation of an affidavit by Mr Stephen Hamner Downes, which was ultimately not read.

   3.The respondent’s unsuccessful arguments that the MaxClean sign was not used as a trademark.

   4.The respondent’s alleged failure to comply with its obligations in relation to discovery.

   5.The alleged failure on the part of respondent to comply with orders made on 8 April 2005 that it use its best endeavours to cause its holding company to provide relevant documents.

   I have been furnished with particulars of the numbers of pages of the transcript recording argument relating to the tender of documents and the consideration of objections to affidavits. 

4. It is undesirable for the Court to attempt to weigh and find in precise detail, with the full benefit of hindsight, aspects of the case and the parties’ conduct of it in order to determine questions of costs.  Such an approach can result in what has been described as undesirable satellite litigation.  Further, as a general rule, the principle that a successful party ought to be compensated for the costs incurred in defending a matter could be subverted if the Court, with the benefit of hindsight, seeks to weigh in fine and precise detail every decision taken by the legal advisers for the successful party.

5. I do not propose to examine in detail the time taken for the examination of the documents tendered by the respondent.  However, I have formed an impression, which it is not practicable to particularise precisely.  There were substantial folios of documents tendered that were rejected or the tender of which was withdrawn.  The applicants refer to some 100 documents that were the subject of the original tender, pointing out that only 29 were ultimately pressed and even those only in part.

6. Mr Downes’ affidavit was prepared and filed in response to an affidavit sworn by Ms Jeanne Strachan on behalf of the applicants.  Both deponents are said to be experts in marketing.  Substantial parts of Ms Strachan’s affidavit were allowed to be read only on the basis of submissions.  When I made that order, Senior Counsel for the respondent indicated that he did not wish to press Mr Downes’ affidavit.  Nevertheless, there were substantial parts of Mr Downes’ affidavit that did not really dispute the part of Ms Strachan’s affidavit that constituted admissible evidence.

7. Some part of the hearing was taken up with the question concerning the extent to which it could be said that the MaxClean sign was used as a trademark.  It is fair to say that not insignificant parts of the hearing were devoted to that question, on which the respondent was unsuccessful.  On the other hand, it is not appropriate to examine in detail the extent to which particular sub-issues resulted in success for one side or the other. Nevertheless, the question of whether MaxClean was used as a trademark was significant and did attract much of the marketing evidence.

8. In my reasons I have already expressed my disquiet concerning the approach adopted by the respondent’s holding company.  Nevertheless, as I indicated, the fact is that the holding company was not subject to any obligation of discovery.  Orders were made that required the respondent to use its best endeavours to obtain documents from its holding company.  While it was not overly successful in that endeavour, I am not persuaded that it failed to use its best endeavours.

9. Nevertheless it is fair, I think, to observe that the respondent did not adopt an entirely co-operative attitude towards discovery.  The respondent conceded that its compliance with its discovery obligation resulted in the production of documents in a number of tranches.  On the other hand, both parties discovered considerable volumes of material.

10. All in all, I do not think it is appropriate that the applicants bear the whole of the costs of the respondent, notwithstanding that the respondent has been totally successful in the proceeding.  It is in the interests of the parties that I endeavour to fix a proportion, rather than make specific orders that costs of particular issues, or particular parts of the preparation and hearing, be borne by different parties.

11. Overall, I consider that the appropriate order is that the applicants pay 85 per cent of the respondent’s costs of the proceedings, save as to any costs already the subject of an existing costs order. 

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated:             22 July 2005

Counsel for the Applicant:	Mr A. Bannon SC
Solicitor for the Applicant:	Freehills
Solicitor for the Respondent:	Dibbs Abbott Stillman
Date of Hearing:	1 July 2005
Date of Judgment:	1 July 2005