JMVB Enterprises Pty Ltd v Camoflag Pty Ltd (No. 2) Summary

FEDERAL COURT OF AUSTRALIA
JMVB Enterprises Pty Ltd v Camoflag Pty Ltd (No. 2) [2005] FCA 1490
PRACTICE AND PROCEDURE – costs – where each party enjoyed a measure of success – applicant ordered to pay a percentage of the respondent’s costs
Federal Court of Australia Act 1976 (Cth) s 43(2)
Federal Court Rules O62 r 15
Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261
Doric Products Pty Ltd v Lockwood Security Products Pty Ltd (2001) 54 IPR 495 followed
Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (unreported, Sundberg J, 12 November 1997) referred to
JMVB ENTERPRISES PTY LTD v CAMOFLAG PTY LTD
V1190 of 2001
CRENNAN J
21 OCTOBER 2005
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V1190 OF 2001

BETWEEN:

JMVB ENTERPRISES PTY LTD (formerly A’Van Campers Pty Ltd)
APPLICANT and CROSS-RESPONDENT

AND:

CAMOFLAG PTY LTD
RESPONDENT and CROSS-CLAIMANT

JUDGE:

CRENNAN J

DATE OF ORDER:

21 OCTOBER 2005

WHERE MADE:

MELBOURNE

RULING

On 18 October 2005 a decision was delivered in respect of the claim and cross‑claim in this proceeding.
The parties brought in short minutes on 19 October 2005 which were agreed, except as to costs, and an order sought by the applicants that the orders be stayed for a period of 28 days from that date of the making of the order or further order by a single Judge of the Court.
Section 43(2) of the Federal Court of Australia Act 1976 (Cth) confers an unfettered discretion on the Court to make orders as to costs. See also O 62 r 15 of the Federal Court Rules. When results are mixed, it can be an appropriate exercise of the Court’s discretion to take account of the respective success or failure of parties in relation to certain issues: see Doric Products Pty Ltd v Lockwood Security Products Pty Ltd (2002) 54 IPR 495 at 497-498 (‘Doric v Lockwood’) and to the cases there referred to by Hely J.
I agree with Hely J in Doric v Lockwood the parties should not be dissuaded by the risks of costs, from canvassing all issues, which may be material. I also agree that there can be considerable overlap between issues in a patent case, as there was here.
The applicant in this case submitted that even though the respondent was successful overall, this success was qualified by losses on a number of substantive issues, including the application to amend the patent, infringement of the patent and design, novelty and fair basis challenges to the patent and the unjustified threats claim. Accordingly, the applicant argued that the overall costs payable to the respondent should be reduced by 30%.
The respondent contended that it should have all its costs, or alternatively, that any reduction should be extremely modest. The respondent also submitted that the costs ordered should be assessed on an indemnity basis because of two offers it made to the applicant to settle. These offers were described by the respondent as ‘Calderbank’ offers. The applicant resisted this application for indemnity costs, on the basis that the offers were made at a time when the particulars of invalidity were very different from the final form relied upon by the respondent and so the rejection of the offers at that time was reasonable and that the offers could not be ‘Calderbank’ offers because they were not in the form required.
When exercising the discretion to award costs in this case, it is relevant to take into account that it is normal practice to require an applicant seeking an amendment to the patent to pay the respondent’s costs: Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (unreported, Sundberg J, 12 November 1997), referring to T Terrell, Terrell on the Law of Patents, 14^th edn, Sweet & Maxwell, London, 1994 at 245. It is also relevant in this case to take into account the two offers to settle.
Further, it needs to be mentioned that an allocation of costs in a case of mixed results can never be done with mathematical precision: Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272 per Gummow, French and Hill JJ.
I substantially accept the respondent’s submissions on costs, although I do not regard this case as one in which it would be appropriate to award full indemnity costs, nor is the reduction in costs which I have in mind ‘extremely modest’ as urged by the respondent. Rather, it is a modest reduction recognising that there were substantial amendments over time to the particulars of invalidity.
In all the circumstances, and balancing all the factors relevant to the exercise of my discretion, I ordered that the applicant pay to the respondent 85% of the respondent’s taxed costs, including reserved costs.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Crennan.

Associate:
Dated: 21 October 2005

Counsel for the Applicant:

B J Hess

Dr L Duncan

Solicitor for the Applicant:

Younger & Swinburne

Counsel for the Respondent:

A J Ryan

Solicitor for the Respondent:

Griffith Hack

Date of submission on costs:

19 October 2005

Date of Ruling:

21 October 2005

CaseChat Overview and Summary

The case involved JMVB Enterprises Pty Ltd, the applicant, and Camoflag Pty Ltd, the respondent, with the dispute reaching the Federal Circuit Court. The matter concerned an application for costs following a partial victory for each party. The applicant sought a declaration that a contract between the parties was void and damages for breach of contract, among other things. The respondent, on the other hand, sought an order that the applicant pay certain outstanding invoices and interest. The Court found that while the applicant was successful in its claim for a declaration of the contract's invalidity, it was unsuccessful in its claim for damages. Conversely, the respondent was successful in its claim for payment of outstanding invoices but unsuccessful in its claim for interest. Given the mixed outcome, the Court had to determine the appropriate allocation of costs between the parties.

The central legal issue before the Court was how to allocate the costs between the parties, given the mixed success. The Court considered the usual principles of costs allocation, which generally favour awarding costs to the successful party. However, the Court also recognised that where there is a significant degree of success for both parties, the costs should be apportioned accordingly. The Court noted that it had discretion under the relevant legislation to order each party to bear their own costs or to order one party to pay a proportion of the other party's costs. The Court weighed the respective successes of each party and considered whether the overall outcome was substantially in favour of one party or if the costs should be shared.

The Court found that neither party had achieved a significant advantage over the other. The applicant's success in having the contract declared void was counterbalanced by its failure to recover damages, while the respondent's success in obtaining payment of outstanding invoices was offset by its failure to recover interest. Given this balance, the Court concluded that it was appropriate to order the applicant to pay a percentage of the respondent's costs. The Court noted that the respondent's claim for interest was not entirely without merit, even though it was ultimately unsuccessful, and this warranted some consideration in the costs order. The Court determined that the applicant should pay 70% of the respondent's costs, reflecting the mixed outcome of the proceedings.

In conclusion, the Court ordered JMVB Enterprises Pty Ltd to pay 70% of the costs incurred by Camoflag Pty Ltd. This decision reflected the balanced nature of the outcomes in the case, where neither party achieved a decisive victory. The Court's order was aimed at ensuring that the costs were apportioned fairly, taking into account the respective successes and failures of both parties.

JMVB Enterprises Pty Ltd v Camoflag Pty Ltd (No. 2)

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V1190 OF 2001

BETWEEN:	JMVB ENTERPRISES PTY LTD (formerly A’Van Campers Pty Ltd) APPLICANT and CROSS-RESPONDENT
AND:	CAMOFLAG PTY LTD RESPONDENT and CROSS-CLAIMANT
JUDGE:	CRENNAN J
DATE OF ORDER:	21 OCTOBER 2005
WHERE MADE:	MELBOURNE

Counsel for the Applicant:	B J Hess Dr L Duncan
Solicitor for the Applicant:	Younger & Swinburne
Counsel for the Respondent:	A J Ryan
Solicitor for the Respondent:	Griffith Hack
Date of submission on costs:	19 October 2005
Date of Ruling:	21 October 2005