Greenfield Products Pty Ltd v Rover-Scott Bonnar Ltd

[1990] FCA 505

C A T C H W O R D S

COSTS - Whether costs should follow the event - judgment against applicant - applicant successful on some issues - principles for apportioning costs.

Greenfield Products Ptv. Ltd.
v. Rover-Scott Bonnar Ltd.

Qld G334 of 1988

PINCUS J.
BRISBANE

14 SEPTEMBER 1990

IN THE FEDERAL COURT OF AUSTRALIA	)
QUEENSLAND DISTRICT REGISTRY	) QLD G334 of 1988
GENERAL DIVISION	1

BETWEEN: GREENFIELD PRODUCTS PTY. LTD.

Applicant

AND: ROVER-SCOTT BONNAR LTD.

Respondent

MINUTES OF ORDER

JUDGE MAKING ORDER:	PINCUS J.
DATE OF ORDER:	14 SEPTEMBER 1990
WHERE MADE:	BRISBANE
THE COURT ORDERS THAT:

1.   The applicant pay the respondent's costs of and incidental to the proceedings, to be taxed, except as to the issues (identified in these reasons as nos. 1, 3, 7, 8 and 9) on which the applicant succeeded.

2.   The respondent pay the applicant's costs of and incidental to the proceedings, to be taxed, so far as they relate to the said issues on which the applicant succeeded.

3.   There be a set-off as to the costs mentioned in orders nos. 1 and 2.

4. As to any order for costs made in the proceedings which included a provision deferring taxation, such

costs be now taxed.

NOTE:	Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA	)
QUEENSLAND DISTRICT REGISTRY	1  QT,D G334 of 1988
GENERAL DIVISION	)

BETWEEN: GREENFIELD PRODUCTS PTY. LTD.

Applicant

AND: ROVER-SCOTT BONNAR LTD.

Respondent

CORAM: PINCUS J.

PLACE: BRISBANE

U: 14 SEPTEMBER 1990

REASONS FOR JUDGMENT

These reasons relate to a question of costs which was reserved. On 11 April 1990, judgment was given against the applicant in a claim for breach of copyright. Subsequently, submissions were received on the question of costs, counsel for the unsuccessful applicant arguing that, because the applicant was successful on some issues and for other reasons, an order that costs simply follow the event should not be made.

The question of the costs of the case is plainly a

large one. Mr. Morris, who argued the question on behalf of	?
l
i
the respondent, said that "certainly there are hundreds of	l :
I..
thousands, probably many hundreds of thousands of solicitor/client costs ... ". The hearing took the best part of three weeks. Elaborate expert evidence was called on each side and one of the experts mentioned that his fee would be about $25,000. The applicant's case was an arguable one, although unsuccessful, and it is a matter for concern that, as I gather from counsel, the costs of a piece of litigation of only moderate complexity are thought to be enormous. I understand that in the United Kingdom a more expeditious form of resolution of one class of intellectual property disputes (patents) is to be inaugurated on 24 September.
Counsel for the applicant suggested that the costs might have been reduced if, as the applicant desired, there had been an exchange of statements of evidence before the trial and counsel implied that the respondent should not have resisted that course. It is correct, in my opinion, that an exchange of statements would, in this instance, probably have reduced costs; it might also have enhanced the prospects of the matter's being resolved without a trial. However, the respondent was entitled to resist an order for statements and it did so successfully; its having done so cannot now be taken into account against it. Counsel for the applicant also
done, no doubt at considerable expense. Counsel contended raised the question of the costs of computer work which was	that I should treat this as unnecessary, but I prefer to leave
that matter to the Registrar who conducts the taxation.
Nevertheless, it appears to me plain that the case is one in which, although successful in the result, the respondent failed on some important questions and that should be reflected in the order for costs. It is convenient to set out the main issues, in the order in which they are dealt with in the reasons for judgment.

1.        Ownership of copyright, including question of assignment: applicant successful (except as to issue 2).

Copyright in drawing of 11-inch pulley: respondent
successful.

Illegality: applicant successful.

Copyright in three-dimensional objects: respondent
successful.

Designs Act: respondent successful.

Infringement: respondent successful, except as to
issue 7.

Question whether respondent used applicant's design

in developing its own: applicant successful.

Section 177 issue: applicant successful.

Delay: applicant successful.

Misleading conduct: respondent successful.
Of these issues, by far the most complex was no. 6.

It should be added that I have treated a party as "successful" in the above analysis if it was, broadly speaking, successful in substance. Further, some of the issues, for example nos. 8, 9 and 10, occupied little time at the hearing; the extent to which they involved expense by way of preparation is perhaps another matter.

The situation might be met by making an order that a particular proportion of the costs be paid by the respondent. In a patent suit, Windsurfina International Inc. v. Petit (1987) A.I.P.C. 90-441, Waddell J. gave the successful defendants 65% of their costs, worked out on the basis of the number of days spent on the issues on which the defendants were unsuccessful (37,864). See also Ritz Hotel Ltd. v. Charles of the Ritz Ltd. (1989) A.I.P.C. 90-567. One of the advantages of following this course, as opposed to simply ordering costs of issues, is that it simplifies the work of taxation.

Sometimes, recognising success on issues is argued to be inconsistent with the basic principle that the winner must have its costs paid, as laid down or reaffirmed in the leading case, Donald Camubell and Companv Limited v. Pollak (1927) A.C. 732. However, the Lord Chancellor's judgment, in which Viscount Dunedin and Lord Phillimore concurred, does not, in my view, lay down as rigid a rule as is often suggested. In particular it is no authority for the proposition that exceptional circumstances must be found to justify any departure from the practice of simply ordering all the costs in favour of the winner. For a strong expression of that view, I refer to the dictum of Atkin L.J. referred to at pps. 809 and 8 2 5 of the report. However, that dictum was criticised (at those pages) by the Lord Chancellor and by Lord Carson. The Lord Chancellor chose the following language in which to express the "true view":

"A successful defendant in a non-jury case has no doubt, in the absence of special circumstances, a reasonable expectation of obtaining an order for the payment of his costs by the plaintiff; but he has no right to costs unless and until the Court awards them to him, and the Court has an absolute and unfettered discretion to award or not to award them. This discretion, like any other discretion, must of course be exercised judicially, and the judge ought not to exercise it against the successful party except for some reason connected with the

case". ( 8 1 1 , 8 1 2 )

I should add that as it does not appear to me to be conclusive, against a submission that success on issues should

be recognised, to say that the party who failed on the	relevant issues was entitled to raise them or acted reasonably
in raising them. Even if that be so, it may still be a proper exercise of discretion to order the party who failed on a particular issue to pay the costs of it, rather than to make an order having the effect that the party who succeeded on that issue will nevertheless pay the costs of it, or to make no order as to the costs of the issue.
It is not easy to find examples in the older cases of relief being given to a party which has been unsuccessful overall, on the ground that it succeeded on some issues, but the modern tendency appears to be to make such orders more freely. In most of the relevant cases, there is little if any discussion of the basis of such orders. But the principles were discussed by Bray C.J., with whom Zelling J. agreed, in Cretazzo v. Lombardi (1975) 13 S.A.S.R. 4 at 12:

"A successful party who has failed on certain issues may well not only be deprived of his own costs of those issues, but ordered in addition to pay his opponent's costs of them, and in this context 'issue' does not mean the precise issue in the technical pleading sense, but any disputed question of fact or, in my view, of law ...".

I respectfully agree, but would add the qualification that it is not by any means the practice to give the unsuccessful party relief in every case in which he or she succeeds on an issue or issues. Such an order will not be made unless the court is well satisfied that, taking the whole

conduct of the matter into account, justice requires it; I am	so satisfied here, having regard to the history of the
proceedings from their inception. I have not overlooked that order no. 1 will carry the general costs of the proceedings, including some interlocutory hearings.

It will be ordered:

The applicant pay the respondent's costs of and incidental to the proceedings, to be taxed, except as to the issues (identified in these reasons as nos. 1, 3, 7, 8 and 9) on which the applicant succeeded.

The respondent pay the applicant's costs of and incidental to the proceedings, to be taxed, so far as they relate to the said issues on which the applicant succeeded.

There be a set-off as to the costs mentioned in orders nos. 1 and 2.

As to any order for costs made in the proceedings which included a provision deferring taxation, such costs be now

taxed. I certify that this and the

six preceding pages are a

true copy of the reasons

for judgment herein of his	. , ,
Honour Mr. Justice Pincus.	! .
I .

Counsel for the applicant:	Mr. R.I. Hanger Q.C. and
Mr. D.K. Smith
Solicitors for the applicant:	Kenny & Loel
Counsel for the respondent:	Mr. A.J.H. Morris
Solicitors for the respondent:	Clarke & Kann
Date of Hearing:	11 and 19 April 1990