BLH Engineering and Construction Pty Ltd v Pro 3 Products Pty Ltd (No 2)

Case [2015] FCA 1021


FEDERAL COURT OF AUSTRALIA

BLH Engineering and Construction Pty Ltd v Pro 3 Products Pty Ltd (No 2) [2015] FCA 1021

Citation: BLH Engineering and Construction Pty Ltd v Pro 3 Products Pty Ltd (No 2) [2015] FCA 1021
Parties: BLH ENGINEERING AND CONSTRUCTION PTY LTD ACN 133 867 875 and BLH SAFETY SOLUTIONS PTY LTD ACN 152 247 792 v PRO 3 PRODUCTS PTY LTD ACN 147 825 885
File number: VID 294 of 2012
Judge: JESSUP J
Date of judgment: 15 September 2015
Catchwords: COSTS – Letter before action – Whether a Calderbank offer – Offer of compromise containing proposal that there be no order as to costs – Whether applicant obtained judgment more favourable than terms of offer – Effect of presumptive entitlement to costs yet to be taxed
Legislation: Competition and Consumer Act 2010 (Cth) Sch 2, ss 18, 29(1)(b), (m), 246(2)(d) of the Australian Consumer Law
Federal Court Rules 2011 (Cth) rr 25.14(3), 40.12, 40.20(3), 40.20(4), 40.23(5), 40.27(6)
Patents Act 1990 (Cth) ss 19, 128, 129A(3)
Cases cited: Calderbank v Calderbank [1976] Fam 93
Date of hearing: 21 August 2015
Place: Melbourne
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 20
Counsel for the Applicants: H Rofe QC with C Cunliffe
Solicitor for the Applicants: Stephens Lawyers & Consultants
Counsel for the Respondent: C Golvan QC with T Cordiner
Solicitor for the Respondent: Thomson Geer

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 294 of 2012

BETWEEN:

BLH ENGINEERING AND CONSTRUCTION PTY LTD
ACN 133 867 875
First Applicant

BLH SAFETY SOLUTIONS PTY LTD ACN 152 247 792
Second Applicant

AND:

PRO 3 PRODUCTS PTY LTD ACN 147 825 885
Respondent

JUDGE:

JESSUP J

DATE OF ORDER:

15 SEPTEMBER 2015

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.Subject to any costs order previously made in this proceeding, and to the orders below, the respondent pay the applicants’ costs of the proceeding, including reserved costs, except costs –

(a)incurred solely in the prosecution of the applicants’ case under the Australian Consumer Law;

(b)incurred solely in relation to the applicants’ claim for damages; and

(c)incurred solely in the prosecution of the applicants’ revocation case under the Patents Act 1990 (Cth).

2.Subject to the orders below, the applicants pay the respondent’s costs –

(a)incurred solely in the respondent’s defence to the applicants’ case under the Australian Consumer Law; and

(b)incurred solely in the respondent’s defence to the applicants’ said revocation case.

3.For the purposes of this proceeding, r 40.12 be modified such that it reads:

If an order is made in favour of a party for payment of the party’s costs, the costs must be taxed in accordance with this Part, unless the parties agree on –

(a)the amount to which the applicants would be entitled under Order 1 made on 15 September 2015 in respect of costs incurred on or before 8 April 2015; and

(b)the amount to which the respondent would be entitled under Order 2 made on 15 September…

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AGLC
BLH Engineering and Construction Pty Ltd v Pro 3 Products Pty Ltd (No 2) [2015] FCA 1021
Case
[2015] FCA 1021
Decision Date

CaseChat Overview and Summary

BLH Engineering and Construction Pty Ltd sued Pro 3 Products Pty Ltd over claims of breaches of the Australian Consumer Law and the Patents Act 1990 (Cth). The dispute centred around allegations of misleading or deceptive conduct and the validity of a patent. After a series of procedural decisions and amendments to the pleadings, the court was tasked with determining the costs associated with the litigation, particularly in light of a prior offer of compromise. The key issue was whether the applicants had obtained a judgment more favourable than the terms of the offer of compromise, thus affecting their entitlement to costs.

The court found that the applicants had obtained a judgment more favourable than the terms of the offer of compromise, which was not a genuine offer under the Calderbank principles. Consequently, the applicants were entitled to costs on an indemnity basis. The court also determined that the presumptive entitlement to costs had not been finally resolved, as the costs had yet to be taxed. To facilitate this process, the court modified several rules of the Federal Court to ensure that costs incurred before a specific date were clearly identified and taxed separately. This approach was intended to provide clarity and ensure that the parties' rights regarding costs were accurately reflected.

The court ordered that the applicants were to receive costs from the respondents, except for those costs incurred in specific areas such as the Australian Consumer Law claims, damages claims, and the revocation case under the Patents Act. Conversely, the respondents were to receive costs from the applicants for their defence in those specific areas. The court further modified the rules to mandate that costs incurred before a certain date be separately identified and taxed, and it granted the parties leave to apply for further orders if necessary. Finally, the court allowed each party to apply for clarification on costs or related matters, ensuring that all aspects of the costs were addressed comprehensively.

Orders

Orders of the court

1. Subject to any costs order previously made in this proceeding, and to the orders below, the respondent pay the applicants’ costs of the proceeding, including reserved costs, except costs –

(a) incurred solely in the prosecution of the applicants’ case under the Australian Consumer Law;

(b) incurred solely in relation to the applicants’ claim for damages; and

(c) incurred solely in the prosecution of the applicants’ revocation case under the Patents Act 1990 (Cth).

2. Subject to the orders below, the applicants pay the respondent’s costs –

(a) incurred solely in the respondent’s defence to the applicants’ case under the Australian Consumer Law; and

(b) incurred solely in the respondent’s defence to the applicants’ said revocation case.

3. For the purposes of this proceeding, r 40.12 be modified such that it reads:

If an order is made in favour of a party for payment of the party’s costs, the costs must be taxed in accordance with this Part, unless the parties agree on –

(a) the amount to which the applicants would be entitled under Order 1 made on 15 September 2015 in respect of costs incurred on or before 8 April 2015; and

(b) the amount to which the respondent would be entitled under Order 2 made on 15 September 2015 in respect of costs incurred on or before 8 April 2015; and

(c) the amounts to which the applicants and the respondent would be entitled under Orders 1 and 2 made on 15 September 2015 respectively.

4. A party’s bill of costs must, additionally to the matters required by the applicable rules, identify the amount to which the party claims to be entitled under Order 1 or Order 2 above, as relevant, in respect of costs incurred on or before 8 April 2015.

5. In the event that the taxing officer gives a notice under r 40.20(3), the notice must, additionally to the matters required by the applicable rules, identify the amount of the estimate that represents costs incurred on or before 8 April 2015.

6. For the purposes of this proceeding, r 40.20(4) be modified such that it reads:

Unless a party interested in the bill objects to the estimate in accordance with rule 40.21, the amount of the estimate is the amount to which the party concerned is provisionally entitled by way of costs.

7. In the event that the taxing officer gives a notice under r 40.23(3), the notice must, additionally to the matters required by the applicable rules, identify the amount that represents costs incurred on or before 8 April 2015.

8. For the purposes of this proceeding, r 40.23(5) be modified such that it reads:

In the absence of a party filing a notice in accordance with subrule (4), the amount to which a bill was provisionally taxed will be the amount to which the party concerned is provisionally entitled by way of costs.

9. For the purposes of this proceeding, r 40.27(6) be modified such that it reads:

The taxing officer is to tax the bill in accordance with this Part. Upon completion of the taxation, he or she must give a written notice to the parties stating the amount for which he or she proposes to issue a certificate of taxation, and identifying how much of that amount represents costs incurred on or before 8 April 2015.

10. When the costs to which all parties are entitled under Orders 1 and 2 above are the subject of one of, or of a combination of –

(a) an agreement as contemplated under r 40.12 as modified

(b) a provisional entitlement under r 40.20(4) as modified;

(c) a provisional entitlement under r 40.23(5) as modified;

(d) a notice under r 40.27(6) as modified;

the applicants have leave to apply, within 21 days, for an order under r 25.14(3).

11. If an application pursuant to the said leave is made, further proceedings under Div 40.2 of the Rules of the Court be stayed pending the order of the court.

12. In the absence of an application pursuant to the leave reserved under Order 10 above, and save to the extent that costs are the subject of agreement as contemplated under r 40.12 as modified, a certificate of taxation of the costs of each party issue conformably with –

(a) that party’s provisional entitlement under r 40.20(4) as modified;

(b) that party’s provisional entitlement under r 40.23(5) as modified; or

(c) the notice under r 40.27(6) as modified which relates to that party’s costs;

as the case requires.

13. Each party have liberty to apply on 48 hours’ notice to the other parties –

(a) on the question of costs; and

(b) on any matter arising under or in relation to the previous orders.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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