Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 4)

The case of Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 4) involves a dispute over alleged trademark infringement between the two parties. The matter was heard in the Federal Court of Australia, where the primary issue was the determination of costs following an unsuccessful application by Cantarella Bros. The central legal questions before the court included whether the unsuccessful party should be liable for indemnity costs due to their rejection of a Calderbank offer, and if the unsuccessful party should have recognised their case could not succeed from a particular date. Additionally, the court had to consider whether costs should be apportioned based on the parties' mixed success on the issues raised at trial.

The court deliberated on the principles governing costs in unsuccessful litigation, particularly focusing on the Calderbank offer and the concept of "ought to have known" that the case could not succeed. The court also examined the appropriateness of apportionment of costs in light of the parties' mixed success on the issues presented during the trial. Given the complexity and importance of these questions, the court referred the determination of whether costs should be awarded on a lump sum basis and the quantum of such costs to a Registrar for inquiry and report under section 54A of the Federal Court of Australia Act 1976 (Cth).

In its decision, the court ordered that Cantarella Bros pay 50% of the costs incurred by Lavazza Australia on a party and party basis. The court also provided that if the parties could not agree on the amount of costs to be paid, the questions of whether costs should be paid on a lump sum basis and the quantum of such costs would be referred to a Registrar for inquiry and report. The orders were stayed pending the outcome of an appeal in another proceeding, NSD 1549 of 2023. The entry of these orders is governed by Rule 39.32 of the Federal Court Rules 2011.