Leonardis & Anor v Theta Developments P/L & Ors No. Scciv-93-344

[2003] SASC 130

LEONARDIS & ANOR v THETA DEVELOPMENTS P/L & ORS
[2003] SASC 130

Costs of Action

1. WILLIAMS J         On 23 November 2000 I gave reasons for my decision upon issues argued at trial.  On 19 April 2001 I dealt with the question of costs whereby I ordered that the first, second and third defendants pay to the plaintiffs their costs of action to be taxed but subject to a reduction in that amount by one sixth.

2. On 12 June 2002 upon appeal the Full Court of the Federal Court set aside my order as to costs and varied the declarations and injunctions so as to limit the relief only to Exhibit P4.

3. In the result upon appeal to the Federal Court the plaintiffs succeeded in establishing infringement with respect to the article called Podfix 1 (Exhibit P4).

4. By order of the Federal Court the matter has been remitted to the Supreme Court of South Australia for the making of:

   “(a)such order for costs of the proceedings in that Court as is appropriate having regard to the outcome of the appeal and cross-appeal;

   (b)such further orders as are appropriate to resolve all issues between the parties.”

5. I will now dispose of the question of costs of the proceedings in this Court upon the issues which have so far been determined.  At my direction the parties have provided written outlines of argument and on 16 August 2002 oral argument was addressed.  I will approach the question of costs afresh except insofar as I adopt my previous reasons as mentioned below.  As I have made this new assessment generally without regard to my earlier decision there should be no expectation of perceived consistency between the two decisions.  Although costs normally follow the event the balancing of relevant factors in a multi issue case such as the present is complex and it would not be useful to attempt any reconciliation between the two decisions.

6. In my earlier decision I noted that the plaintiffs and the defendants (corporate and personal) respectively had common representation so that there was basically one set of costs incurred on each side - subject to bringing to account the question of liability of the personal defendants.  I will again adopt that approach.  In my earlier decision upon costs I observed that separate awards of costs in respect of these aspects where a party had been successful would leave room for argument upon taxation as to apportionment of the individual items of costs; that process itself is likely to lead a taxing officer to wield a broad brush.  With the benefit of hearing the trial I consider that there are advantages if I take responsibility for making the apportionment by wielding that same broad brush  I have therefore decided that there should be one order which brings to account all relevant factors.

7. The plaintiffs have succeeded with respect to Podfix 1 but they have otherwise failed.  The order for costs will reflect the limited success of the plaintiff against the corporate defendants but the order must otherwise reflect the success of all defendants.

8. In my opinion there is a considerable overlap in terms of evidence and forensic argument between the complaint raised with respect to the Podfix 1 and the other complaints but at the end of the day my impression is that the corporate defendants have had a greater measure of success than the plaintiffs.  The personal defendants have been wholly successful.  Nevertheless I have regard to the remarks of Jacobs J in Cretazzo v Lombardi (1975) 13 SASR 4 at 16:

   “But trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law.  The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case.  There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike.  I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues.”

9. I note also the comment of Hely J in Doric Products Pty Ltd v Lockwood Security Products Pty Ltd [2002] FCA 282 where His Honour said:

   “Costs normally follow the event, but the Court has a general discretion to award costs, albeit the discretion must be exercised judicially.  Where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which it has failed.  A successful party who has failed on certain issues may not only be deprived of the costs of those issues, but may be ordered as well to pay the other party’s costs: Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 at 48,136. The courts have cautioned against too ready a resort to apportionment according to issue based outcomes. See, eg, Australian Trade Commission v Disktravel [2000] FCA 62. Justice may not be served if the parties are dissuaded by the risks of costs from canvassing all issues which might be material to the decision in the case: Cretazzo v Lombardi (1975) 13 SASR 4 at 16. That may be particularly so in patent cases in which one often encounters overlapping between issues. Thus, for example, there is often an overlap or interconnection between issues of construction, sufficiency, fair basis and obviousness.”

10. When moulding an order I have used these statements as justifying a more generous approach to the plaintiffs’ position than the relative degree of success of the parties (standing alone and by reference to the number of claims) might otherwise suggest as appropriate.  I have found guidance in the cases collected in Robinson v Australian Association of Social Workers [2000] SASC 239.

11. In my opinion justice will be achieved if I do not award costs.  There will be no order as to costs.