Luxottica Retail Australia Pty Ltd v Grant

Luxottica Retail Australia Pty Ltd sought leave to appeal from a costs order made by White J in the Supreme Court of New South Wales. The underlying dispute concerned confidential and copyrighted documents emailed by an employee to her home computer prior to her termination. By the time of trial, the only substantive issue remaining was the applicant's claim for copyright infringement damages, which resulted in a nominal award of $10. The primary judge ordered the applicant to pay the respondents' costs from 18 February 2009, finding that the applicant had unreasonably rejected a settlement offer made by the defendants on 17 February 2009, which would have provided substantially the whole of the relief ultimately obtained.

The legal issues before the Court of Appeal were whether there was a sufficient basis to interfere with the primary judge's discretionary costs order, particularly in light of the applicant's nominal success at trial on the sole substantive issue and the rejection of the settlement offer. The applicant's challenge focused on the primary judge's reasoning that the applicant was not entitled to its costs as at 17 February 2009, which underpinned the decision to award costs against it from that date.

The Court of Appeal, comprising McColl and Basten JJA, dismissed the application for leave to appeal. Their Honours reasoned that the primary judge's decision to award costs against the applicant from 17 February 2009 was a proper exercise of discretion. This was based on the finding that the applicant had unreasonably rejected the defendants' settlement offer, which had been made prior to the hearing and would have substantially achieved the outcome the applicant ultimately secured. The court noted that the applicant's insistence on obtaining its costs, despite failing on the substantive issue litigated, was a key factor in the rejection of the offer. The court applied the principle that an appellate court will generally not interfere with a discretionary costs order unless there is an error of law or the order is plainly wrong.

Consequently, the Court of Appeal ordered that the application for leave to appeal against the costs order made by White J be dismissed, and that the applicant pay the respondents' costs of the application in the Court of Appeal.