Foxworth P/L v Polwood P/L (No 2)

[2007] QSC 403

SUPREME COURT OF QUEENSLAND

CITATION:	Foxworth P/L & Ors v Polwood P/L & Ors (No 2) [2007] QSC 403
PARTIES:	FOXWORTH PTY LTD (ACN 010 516 855) (first plaintiff) AUSSIE PEAT PTY LTD (ACN 085 498 933) (second plaintiff) PEACHESTER THOROUGHBREDS PTY LTD (ACN 069 059 294) (third plaintiff) PAUL DAVID POWER (fourth plaintiff) v POLWOOD PTY LTD (ACN 010 708 146) (first defendant) LEA CHARLES RAMPTON (second defendant) MARGUERITE FRANCOISE RAMPTON (third defendant) POLWOOD AUSSIE BARK PTY LTD (ACN 068 346 529) (fourth defendant)
FILE NO:	S5291 of 2002
DIVISION:	Trial Division
PROCEEDING:	Trial – costs determination
ORIGINATING  COURT:	Supreme Court at Brisbane
DELIVERED ON:	9 February 2007
DELIVERED AT:	Brisbane
JUDGE:	Muir J
ORDER:	No order as to costs.
CATCHWORDS:	PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – OTHER CASES – FAILURE IN PORTION OF CASE – where plaintiffs successful on only
some issues – whether costs should be awarded on basis of units of litigation –whether no order for costs should be made
Interchase Corporation Limited (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 3) [2003] 1 Qd R 26, cited
SOLICITORS:	Hawthorn Cuppaidge & Badgery for the plaintiffs Deacons for the defendants

1. Judgment in this matter was delivered on 1 August 2006. Costs were reserved and the parties were invited to deliver written submissions. There was no urgency about that as I was to be absent on leave for some weeks. The last of the submissions on costs were received on 2 October 2006, by which time there had been an appeal against the decision by the plaintiffs. The Court of Appeal dismissed the appeal with costs on 22 December 2006. Unfortunately, I overlooked the fact that determination of the costs of the proceedings, apart from those relating to the appeal, remained outstanding.

2. The defendants’ submissions on costs are 50 paragraphs in length. They analyse the claims in the proceedings in great detail, breaking the proceedings up into “units of litigation” and attributing to each unit a percentage or share of or in the overall issues. As a result of this exercise the defendants contend that they should have 78 per cent of their costs of the proceeding. Alternatively, it is submitted that, if an apportionment order is not made, the defendants should be ordered to pay the plaintiffs’ costs in respect of the plaintiffs’ chattel claims and the plaintiffs should be ordered to pay the defendants’ costs in respect of:

(a)	The plaintiffs’ misrepresentation, Trade Practices Act and warranty claims;
(b)	The plaintiffs’ copyright case; and
(c)	The first defendant’s deposit claim.

1. Not surprisingly, the defendants’ approach does not find favour with the plaintiffs. They submit that the plaintiffs ought bear their own costs. Alternatively, they submit that the defendants should pay the plaintiffs’ costs of and incidental to the chattel claims and “the patent representation” but that there otherwise should be no order as to costs. Alternatively, the plaintiffs submit that any further consideration of the issue of costs should await “the proposed further hearing of matters relating to the declaratory relief.” I am not sure whether that is a reference to the appeal to the Court of Appeal or the appeal in respect of the patent and copyright aspects of the matter to the Full Court of the Federal Court.

2. Costs of a proceeding are in the discretion of the Court. Under r 689 of the Uniform Civil Procedure Rules, costs follow the event “unless the Court considers another order is more appropriate.” The “event” refers to the issues of substance between the parties raised on the claim for pleadings.[1]

   [1]            Interchase Corporation Limited (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 3) [2003] 1 Qd R 26 at

3. In their third further amended statement of claim, amended pursuant to an order made on 21 July 2006, the plaintiffs (not distinguishing between claims made by the four plaintiffs) claimed:

   1.            Delivery up of the PSU;

   2.            Delivery up of the balance of the chattels;

   3.            Damages for breach of the Trade Practices Act in the sum of $105,000;

   4.            Damages for breach of the Trade Practices Act in the sum of $332,573;

   5.            Delivery up of the infringing PSU;

   6.            A declaration as to patent rights;

   7.            A declaration that the deed of licence and business sale agreement are void ab initio; and

   8.            Interest.

4. The plaintiffs succeeded on claims 1 and 2, but failed on all other claims. On the face of that simple analysis, the defendants had a much greater measure of success in the litigation than the plaintiffs. The analysis, however, fails to take into account other issues in the proceedings. The defendants (again not distinguishing between different claims made by different defendants) claimed:

(a)	an account of the net profits generated by the business conducted by the first plaintiff during the term of the licence and payment of any sum found due and owing;
(b)	damages for breach of the licence;
(c)	interest;
(d)	declarations in respect of copyright in the PSU;
(e)	declarations in respect of patent entitlement;
(f)	mandatory orders in respect of copyright on PSU drawings and in respect of a patent application; and
(g)	a declaration as to forfeiture of the $30,000 deposit.

1. All of the counterclaims were abandoned by the defendants during the trial with the exception of the patent and deposit claims. The defendants succeeded on the counterclaim for recovery of the deposit.

2. In those circumstances it is reasonable to proceed on the basis that the defendants accepted that the abandoned claims were unlikely to succeed.

3. It is relevant also that the litigation commenced as a simple claim by originating application for return of the PSU and associated chattels. The counterclaims played a role in transforming relatively straightforward litigation into the complex set of issues which fell for determination on the trial. Relevant also is the fact that there never was a defence of any substance to the chattel claim.

4. Neither party succeeded on its patent claims but the facts found in that regard were more beneficial to the plaintiffs than the defendants and vindicated an alternative position foreshadowed by the plaintiffs at the commencement of the trial.

5. The defendants contend that the plaintiffs’ copyright case was “clearly the predominant unit of litigation in the proceeding.” In terms of monies claimed that assessment would seem to be accurate and there was also a substantial body of evidence adduced in that case. That evidence, however, to a substantial degree, was relevant to other aspects of the case, including the patent case. And, of course, the evidence was relevant to the defendants’ late abandoned copyright claims.

6. The plaintiffs had a measure of success also in relation to their misrepresentation and Trade Practices Act claims and were not alone in advancing claims and evidence which attracted adverse findings. In all of the circumstances my conclusion is that the just result is that the costs lie where they fall. I am not attracted to the notion that the parties should be exposed to a potentially lengthy and expensive costs assessment. I make no order as to costs.