Solitaire Homes Pty Ltd v Urban Ventures Pty Ltd and Ors (No.2)

Case

[2011] FMCA 330

13 May 2011


FEDERAL MAGISTRATES COURT OF AUSTRALIA

SOLITAIRE HOMES PTY LTD v URBAN VENTURES PTY LTD & ORS (No.2) [2011] FMCA 330
COPYRIGHT – Alleged infringement of copyright of project home house plans – costs – indemnity costs (principles of) – Sanderson & Bullock costs orders – consideration of appeal judgment and findings thereof in relation to first instance costs orders.
Copyright Act 1968 (Cth), ss.115(2) & (4)
Federal Court of Australia Act 1976, ss.25(1AA), 43(1) & (2)
Federal Magistrates Act 1999, s.79(2) & (3)
Federal Magistrates Court Rules 2001, Part 21
Bullock v London General Omnibus Co [1907] 1 KB 264
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Foots v Southern Cross Mine Management Pty Ltd (2008) 82 ALJR 173
Gould v Vaggelas (1985) 157 CLR 215
Lackersteen v Jones (No.2) (1988) 93 FLR 442
Latoudis v Casey (1990) 170 CLR 534
Mouratidis v Brown [2002] FCAFC 330
Oshlack v Richmond River Council (1998) 193 CLR 72
Probiotec Ltd v University of Melbourne (2008) 166 FCR 30
Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 141 ALR 727
Ruddock v Vadarlis (No.2) (2001) 115 FCR 229
Sanderson v Blyth Theatre Co [1903] 2 KB 533
Applicant: SOLITAIRE HOMES PTY LTD
First Respondent: URBAN VENTURES PTY LTD T/AS URBAN DESIGN AND DRAFTING
Second Respondent: JAIME CHARLES FARRELLY
Third Respondent: A & A MARTINS PTY LTD T/AS
A & A CONSTRUCTIONS
File Number: CAG 53 of 2007
Judgment of: Neville FM
Hearing dates: 17, 18, 19 November 2008
17, 18, 19 March 2009
17 & 18 August 2009
Date of Last Submission: 23 February 2011
Delivered at: Canberra
Delivered on: 13 May 2011

REPRESENTATION

Counsel for the Applicant:

Mr Higgs SC

Mr Pappas

Solicitors for the Applicant: Nicholl & Co
Counsel for the First and Second Respondent: Ms Olsson SC
Solicitors for the First and Second Respondent: Trinity Law
Counsel for the Third Respondent: Mr Lunney SC
Solicitors for the Third Respondent: Maurice Blackburn Lawyers

ORDERS

  1. Each party pay their own costs in relation to the default judgment.

  2. The First and Second Respondents be jointly and severally liable for the Applicant's costs of proceedings at first instance, either as agreed or taxed.

  3. Subject to Order 1, the Applicant pay one quarter, and the First and Second Respondents pay three quarters of the Third Respondent's costs, either as agreed or taxed.

  4. The Applicant pay costs of Mr Martins in relation to its unsuccessful attempt to join him as a party to the proceedings. 

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT CANBERRA

CAG 53 OF 2007

SOLITAIRE HOMES PTY LTD

Applicant

And

URBAN VENTURES PTY LTD T/AS URBAN DESIGN
AND DRAFTING

First Respondent

JAIME CHARLES FARRELLY

Second Respondent

A & A MARTINS PTY LTD T/AS A & A CONSTRUCTIONS

Third Respondent

REASONS FOR JUDGMENT

Introduction

  1. On 23 March 2010 I delivered reasons and made the following orders:

    (i) That the Applicant be declared the copyright owner of the plans for the Solitaire house, and of the dwelling known as the Solitaire house.

    (ii) That pursuant to section 115(2) of the Copyright Act 1968, the First Respondent pay to the Applicant damages in the sum of $10,000.

    (iii) That pursuant to section 115(4) of the Copyright Act 1968, the First Respondent pay to the Applicant exemplary damages in the sum of $2,500.00.

    (iv) That the cross-claim against the Third Respondent by the First and Second Respondents be dismissed.

    (v) That the Application to adduce further evidence relating to an account of profits against the Third Respondent be dismissed.

    (vi) That the Applications to adduce tendency evidence against, respectively, the Second Respondent (by the Applicant), and against the Third Respondent (by the Second Respondent), be dismissed.

    (vii) That any submissions in relation to costs be filed and served by each of the parties within 28 days of the date of these Orders.

  2. The orders only in relation to damages were appealed as well as being subject to a cross-appeal, which is also to say that all matters in relation to liability in the proceedings were not the subject of any appeal.

  3. On 19 April 2010, by consent of the Applicant and the First and Second Respondents (the Third Respondent neither consenting nor opposing), an order was made in Chambers which stayed the “costs” order.  The intention of such an order was to put ‘on hold’ the matter of costs until after any and all appeals were dealt with.[1]

    [1] Further consequential orders in relation to submissions regarding costs were made by consent on 29 January 2010.  The details are of no immediate moment.

  4. On 4 May 2010 I made further orders whereby the orders in relation to damages under both s.115(2) and s.115(4) of the Copyright Act 1968 were stayed pending the outcome of the appeal.

  5. The appeal was determined by a single Justice of the Federal Court, Jagot J.[2]  Her Honour dismissed the appeal in relation to damages but allowed, in part, the cross-appeal.  Jagot J delivered judgment in the matters that were the subject of appeal on 14 December 2010.

    [2] It should be noted that the Third Respondent was not a party to either the appeal or the cross-appeal.

  6. In detail, the Federal Court’s orders were as follows:

    (i) The appeal be dismissed.

    (ii) The cross-appeal be allowed in part.

    (iii) Orders 2 and 3 of the orders of the Federal Magistrates Court of 23 March 2010 be set aside.

    (iv) The first and second cross-respondents to the cross-appeal pay the cross-appellant damages in the sum of $10,000 under s.115(2) of the Copyright Act 1968 (Cth).[3]

    (v) The first and second-cross-respondents to the cross-appeal pay the cross-appellant damages in the sum of $10,000 under s.115(4) of the Copyright Act 1968 (Cth).

    (vi) The first and second cross-respondents to the cross-appeal pay the costs of this appeal, as agreed or taxed.

    [3] For the sake of completeness, it may be noted that the import and effect of Jagot J’s order in this regard was simply to reflect her Honour allowing an application for Mr Farrelly to be held personally liable for the infringement of Solitaire’s copyright.  This was so notwithstanding Solitaire’s admitted oversight in not making such an application during the trial.  See Urban Ventures Pty Ltd v Solitaire Homes Pty Ltd [2010] FCA 1373 at [27] – [37]. There was no alteration to the order in relation to the quantum of damages. See the discussion on compensatory damages at [38] – [45].

  7. Curiously, notwithstanding that Jagot J had exercised the appellate jurisdiction of the Federal Court pursuant to s.25(1AA) of the Federal Court of Australia Act 1976, a further appeal was lodged on


    24 December 2010.  That appeal was ultimately discontinued on


    21 January 2011.

  8. Now that all matters the subject of appeal have been concluded, and that written submissions have been provided by all parties, it is now time to consider what orders should be made in relation to the costs of the trial.  These reasons deal with that single issue.

Submissions

  1. In short, there are four aspects concerning costs to consider and determine.  The first relates to the costs generally of the trial.  The second relates to the costs of an application made by the Third Respondent at the commencement of the trial to set aside an earlier entered default judgment against it.  The third aspect concerns costs in relation to the First and Second Respondents’ claims for contribution and indemnity against the Third Respondent.  The fourth, and final, aspect relates to the application by the Applicant, very late in the trial, to join Mr Martins (one of the directors of the Third Respondent) as a party to the proceedings.

  2. Costs in relation to the trial:  In broad terms, the respective positions of the parties may be summarised as follows.

  3. The Applicant contended that the First and Second Respondents should pay the Applicant’s costs of and incidental to the proceedings on either an indemnity, or alternatively, a party/party basis.

  4. I interpose here to note that in Colgate-Palmolive Co v Cussons Pty Ltd, Sheppard J set out in some, but not exhaustive, detail some of the categories or circumstances which may entitle a court, in the exercise of its discretion, to award costs on an indemnity basis.[4]  His Honour’s comments have been followed by the Full Court of the Federal Court of Australia.[5]

    [4] See Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, especially at pp.232-234.

    [5] See, for example, the Full Court decision in Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 141 ALR 727 (Black CJ, Cooper & Merkel JJ).

  5. The Applicant also submitted that the First and Second Respondents should pay the costs of the Third Respondent on either an indemnity, or alternatively, on a party/party basis.

  6. In its submission, the principle for such an order is what is described as a “Sanderson order”, in preference to a “Bullock order.”[6]  In its view, the preferred course would be for a Sanderson, rather than, a Bullock order.

    [6] These orders are named after – respectively – Sanderson v Blyth Theatre Co [1903] 2 KB 533, and Bullock v London General Omnibus Co [1907] 1 KB 264.

  7. To interpose here again, it is apposite to note the comments of Brennan J in Gould v Vaggelas in relation to the circumstances in which a Bullock order may be made.  His Honour said:[7]

    Although the making of a Bullock order is in the discretion of a trial judge, the mere joinder of two causes of action against separate defendants in the one action is insufficient to support the making of an order against an unsuccessful defendant when the other defendant is exonerated. A judicial discretion can be exercised to make a Bullock order against an unsuccessful defendant in an action brought against two or more defendants for substantially the same damages only if the conduct of the unsuccessful defendant in relation to the plaintiffs' claim against him showed that the joinder of the successful defendant was reasonable and proper to ensure recovery of the damages sought.

    [7] Gould v Vaggelas (1985) 157 CLR 215 at p.260.

  8. Rightly in my view, the First and Second Respondents referred to the pre-conditions for a court imposing a Bullock order as specified by Asche CJ in Lackersteen v Jones (No.2).  In that case, his Honour noted the following principles:[8]

    1. It must be seen to have been reasonable and proper for the plaintiff to have sued the successful defendant.

    2. The causes of action against two or more defendants need not be the same but they must be substantially connected or dependent the one on the other.

    3. While it is essential to find that the plaintiff has acted reasonably and properly that alone is not sufficient.  The court must find something in the conduct of the unsuccessful defendant which makes it a proper exercise of discretion.

    4. Finally, in considering whether to make such an order, the court should, in the exercise of its discretion balance overall two considerations of policy: the first, that an unnecessary multiplicity of actions should not be forced on litigants, so that a plaintiff who acts reasonably in joining two or more defendants should not be penalised or lose the fruits of his victory in costs on the basis that he should have either elected or taken separate actions; secondly, that an unsuccessful defendant should not have to pay more than one set of costs merely because he is unsuccessful."

    [8] Lackersteen v Jones (No.2) (1988) 93 FLR 442 at p.449. These principles were approved by the Full Court of the Federal Court (Wilcox & Higgins JJ) in Mouratidis v Brown [2002] FCAFC 330 at [81].

  9. In my view, not dissimilar considerations apply to the making of a Sanderson order.  However, in accordance with authority noted later, I stress that the making of any costs order depends on the judicial exercise of the Court’s discretion in the light of the facts and circumstances of the case at hand.

  10. In summary, the Applicant’s arguments were that: (a) it had been wholly successful at trial in establishing its copyright in the relevant plans and in the Solitaire house; (b) it had been wholly successful in recovering damages as well as exemplary damages under the Copyright Act; (c) the relevant copying had been done by the Second Respondent; (d) the First and Second Respondents had claimed that there had been no copying, and that they were innocent dupes of Mr Martins, or the Third Respondent.  These assertions were wholly rejected, as were the claims for contribution and or indemnity by the First and Second Respondents against the Third Respondent.

  11. Formally, the Applicant sought no separate costs orders in relation to both the application to set aside the default judgment against the Third Respondent, and the claims for contribution and indemnity by the First and Second Respondents against the Third Respondent.

  12. However, I should note that the Applicant stressed that any costs orders made should apply jointly to both the First and Second Respondents. 
    I also note the orders made by Jagot J in relation to the Second Respondent to which I have already referred.  In my view, in the unlikely event of any doubt about the propriety and justice of any such order, her Honour’s orders make inevitable that any costs orders must involve the Second Respondent directly, and jointly, with the First Respondent.

  13. Finally, the Applicant submitted that there was a wide discretion vested in the Court in relation to costs pursuant to s.79 of the Federal Magistrates Act 1999, and under this Court’s Rules.[9]

    [9] See Federal Magistrates Court Rules 2001, Part 21.

  14. So far as the First and Second Respondents (“Urban and Mr Farrelly”) were concerned, their submissions and orders sought were as follows.

  15. Urban and Mr Farrelly contend that, on the principle that ‘costs follow the event’, (a) the Third Respondent pay the costs of the other parties in relation to the application (of May 2008) for default judgment and the application (of November 2008) to set aside the default judgment; (b) Urban pay the Third Respondent’s costs in relation to the cross-claim (on a party/party basis, as agreed or taxed); (c) the Applicant pay the costs of Mr Farrelly on a party/party basis as agreed or taxed up to and including 14 November 2008 (excluding the costs in relation to the default judgment); (d) the Applicant pay the Second Respondent’s costs, on an indemnity basis from 15 November to date; (e) the Applicant pay the costs of the Third Respondent on a party/party basis not otherwise covered by the orders proposed; (f) Urban pay the Applicant’s costs on a party/party basis in relation to costs not otherwise the subject of the proposed orders.

  16. The substance of the submissions on behalf of Urban and Mr Farrelly was to the effect that the conduct of the proceedings was entirely proper and that all matters that were raised or put in issue was so as to enable the Court to determine them.  In such circumstances, it was not possible for either Urban or Mr Farrelly to make any concession, which may have had the effect of shortening the proceedings.  Moreover, there were, it was submitted, no circumstances (or insufficiently so) that would entitle the Court to award either indemnity costs against Urban or Mr Farrelly, or to make either a Sanderson or Bullock order.

  17. The Third Respondent submitted that, given the exceptional circumstances that surrounded the default judgment and it being set aside, the appropriate course should be that each party should pay their own costs in relation to that aspect of the proceedings.

  18. The Third Respondent further submitted that it was not an appropriate matter in which either a Sanderson or Bullock order should be made.  Instead, the most appropriate orders (all on a party/party basis) were that (a) the Applicant pay the costs of the Third Respondent of the Applicant’s application; (b) the Applicant pay the costs of Mr Martins in relation to its [unsuccessful] application to join him as a party to the proceedings; (c) Urban and Mr Farrelly pay the Third Respondent’s costs of their cross-claim/claim for indemnity and contribution; and (d) Mr Farrelly pay the Third Respondent’s costs of his application to adduce tendency evidence.

  19. The following may be observed briefly in relation to the Third Respondent’s submissions.

  20. The Third Respondent advised that it would make no submission in relation to the costs as between the Applicant and Urban and


    Mr Farrelly.  Its submissions were confined to (a) the default judgment issue, (b) whether a Sanderson or Bullock order should be made, and (c) whether the Applicant should pay the Third Respondent’s costs. 

  21. In relation to the issues just identified in (b) and (c) in the previous paragraph, the Third Respondent submitted that the matter could have been determined as between the Applicant and Urban and Mr Farrelly without the involvement of the Third Respondent.  It was also submitted that the joinder of the Third Respondent was essentially a tactical ploy on the part of the Applicant to strengthen the case against Urban and Mr Farrelly, and to define the proceedings as primarily a contest between all the Respondents.  In those circumstances, it was submitted that the appropriate order was for the Applicant to pay the Third Respondent’s costs, and that no Sanderson or Bullock order should be made.

  22. I noted in the reasons given at the time the extraordinary circumstances that led me to set aside the default judgment.  In this regard, I note Jagot J’s comment, at [16] of her Honour’s judgment, to the effect that the setting aside of the default judgment was ‘almost inevitable’ in the light of the tragic and traumatic circumstances that faced Mr Martins.  These circumstances led the Third Respondent to submit that each party should bear their own costs in relation to the default judgment.

  23. The Third Respondent made no submissions in support of the order sought that the Applicant pay the costs of Mr Martins in relation to the Applicant’s unsuccessful attempt to join him, very late in the proceedings, as a party.

Discussion & Resolution

  1. General Principle: It has already been mentioned that the Court’s power to award costs is defined in broad terms in s.79 of the Federal Magistrates Act 1999. The terms of s.79(2) and s.79(3) are in similar terms to s.43(1) and (2) of the Federal Court of Australia Act 1976.

  2. The discretion given to the Court is clearly very wide.  The following brief survey of relevant judicial authority gives guidance in relation to the exercise of that wide discretion.  It is sufficient to refer to five cases.

  3. In Latoudis v Casey, the High Court noted the following.[10]  First, Mason CJ said, at [13]:[11]

    … in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant.  To do so conforms to fundamental principle.  If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party.  They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings….

    [10] (1990) 170 CLR 534.

    [11] 170 CLR at pp.542-543.  McHugh J commented to similar effect at pp.566-567.

  4. Secondly, Mason CJ commented further that “I am persuaded that, in ordinary circumstances, an order for costs should be made in favour of a successful defendant.”[12]  His Honour’s comments should be appreciated as being made in the context of costs in criminal proceedings.

    [12] 170 CLR at p.544 [16].

  5. Thirdly, McHugh J said:[13]

    … civil courts act on the basis that a successful party has a reasonable expectation of obtaining an order for costs and that the discretion to refuse to award costs should not be exercised against the successful party except for a reason connected with the case.  Thus, if a plaintiff sues on two causes of action and succeeds on one, he or she will obtain the general costs of the action and the costs of the cause of action on which he or she succeeded, but the defendant will receive the costs of the cause of action on which he or she was successful….

    [13] 170 CLR at p.568 [6].

  1. In the later High Court case of Oshlack v Richmond River Council, a number of Justices commented on the principles to be applied in relation to costs.  Summarily, I note the following.

  2. Although dissenting in the result, Brennan CJ confirmed that, in his view, the comments made by Mason CJ in Latoudis v Casey (noted above) were correct.[14]

    [14] See Oshlack v Richmond River Council (1998) 193 CLR 72 at p.75 [1].

  3. And although also dissenting in the result, McHugh J outlined a number of significant matters which, in my view and subject to later observations, are relevant to this Court’s consideration of the award of costs in the current matter.

  4. However, before coming to his Honour’s comments, it is apposite to note (also briefly) some remarks of general application from the joint judgment of Gaudron & Gummow JJ.  Their Honour’s noted (internal citations omitted):[15]

    There is no absolute rule with respect to the exercise of the power conferred by a provision such as s 69 of the Court Act that, in the absence of disentitling conduct, a successful party is to be compensated by the unsuccessful party. Nor is there any rule that there is no jurisdiction to order a successful party to bear the costs of the unsuccessful party….

    [15] 193 CLR at p.88 [40].

  5. Further, their Honours’ said:[16] “Nor, before or since the introduction of the Judicature system, has there been any absolute proposition that the sole purpose of a costs order is to compensate one party at the expense of another.”

    [16] 193 CLR at p.89 [43].

  6. Turning to the comments of McHugh J, it is sufficient to note that his Honour’s general discussion of principle is set out at [63] – [70].  Of more immediate relevance is his Honour’s comment, at [80]:[17]

    Mason CJ, Toohey J and I were all of the view that one starts with the proposition that a successful party to litigation (the defendant in Latoudis) can usually expect to receive a costs award in its favour unless its own conduct disentitles it from the benefit of the discretion.  It is the conduct of the successful party, and not the conduct or motives of the unsuccessful party, which is relevant to the exercise of the costs discretion ….

    [17] See also comments by Kirby J at 193 CLR at pp.121-122 [134].

  7. Then, relying on comments from Oshlack (from the joint judgment of Gaudron & Gummow JJ to which I have referred), in Foots v Southern Cross Mine Management Pty Ltd the High Court confirmed that costs did not automatically follow the event.  The Court also noted the broad discretion of a court in relation to costs.[18]

    [18] See Foots v Southern Cross Mine Management Pty Ltd (2008) 82 ALJR 173 at pp.181-182 [26] – [27].

  8. In my view, it is sufficient, and helpful, to refer further to the following two decisions of the Full Court of the Federal Court of Australia.

  9. In Ruddock v Vadarlis (No.2), the joint judgment of Black CJ & French J set out in significant detail ‘principles governing awards of costs.’[19] Their Honour’s discussion was in the context of s.43 of the Federal Court of Australia Act (“the Federal Court Act”), to which I have earlier referred, particularly in the context of the similarity of that section with s.79 of this Court’s foundational legislation. The following matters should be noted from their Honour’s judgment.

    [19] Ruddock v Vadarlis (No.2) (2001) 115 FCR 229 at pp.234-241 [9] – [25].

  10. First, at [12], their Honour’s observed:[20]

    The award of costs to a successful party is principally by way of perceived restorative justice.  The general rule assumes that where an applicant succeeds it will have incurred costs because the respondent's conduct made it necessary for the applicant to bring the proceedings.  If the applicant fails, the respondent will have incurred costs defending an action which ought not to have been brought against it.  The order made in such cases is compensatory ….

    [20] 115 FCR at p.235.

  11. Secondly, there were a number of qualifying comments to the original statements of basal principle.  Thus, at [13], Black CJ and French J said: “Where the case is close or difficult and involves no obvious element of fault on the part of the loser the proposition that costs automatically follow the event may work unfairness.  Moreover it may set up a significant barrier against parties of modest means even if the contemplated claim has substantial merit.”

  12. Thirdly, at [15], their Honours’ noted that “[c]osts may be apportioned according to success or failure on particular distinct or severable issues.”

  13. Finally, the Full Court (Finn, Rares & Besanko JJ) in Probiotec Ltd v University of Melbourne provided further guidance in relation to costs.[21]  The principal judgment was delivered by Rares J (Finn J, at [1] agreeing); Besanko J concurring, at [82], as well as making some brief, additional observations.  The remarks of Rares J are at [45] – [52].[22]

    [21] Probiotec Ltd v University of Melbourne (2008) 166 FCR 30.

    [22] 166 FCR at pp.42-44.

  14. Most relevant to the issues before this Court, his Honour noted, at [46] by reference to Oshlack and Foots v Southern Cross Mine Management (among other cases), that there is no automatic rule that costs always follow the event.[23]

    [23] See also Rares J’s further comments on the exercise of discretion at 166 FCR at pp.42-43 [47].

  15. Next, his Honour noted, at [48], that the general power conferred by s.43 of the Federal Court Act (and, in turn, s.79 of the Federal Magistrates Act) “is not to be narrowly construed.”

  16. Finally, echoing somewhat the earlier comments of Black CJ and French J in Ruddock v Vadarlis (noted above), Rares J noted the importance of recognising the relationship between the claims made in the litigation in question. His Honour said, at [62]:

    A factor which may be relevant in the exercise of a discretionary judgment in making an order for costs is the responsibility of the party against whom the order is sought for the costs incurred by the successful party.  Evaluating that responsibility may require an examination of not only the nature and degree of the involvement of each of the parties, but of the essential claims themselves.

  17. In the light of the statements of principle to which I have referred, I note the following in relation the respective costs applications before me in the current proceedings.  I do so having due regard also to the findings and comments of Jagot J in the judgment which her Honour delivered in this matter, confined as it was in scope.  The following comments and orders should also be seen in the light of the facts and findings made in my original judgment.  Unless specifically necessary, I will not repeat anything said in that judgment.

  18. First, having regard to the principles set out by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd, in relation to the circumstances that may give rise to an award of costs on an indemnity basis, in my view, those circumstances have not been established either at all or with sufficient particularity as to warrant an award of costs on any thing other than ‘the usual basis’, namely, on a party/party basis.

  19. Secondly, having regard to the principles upon which a Bullock (or Sanderson) order is made, in my view, the circumstances of this case are such that it is not apposite to make either of those orders identified.

  20. Thirdly, regarding the default judgment in all its dimensions, given the comments already made by me in the course of the proceedings at first instance, and by her Honour on appeal, in my view, each party should pay its or their own costs in relation to the default judgment.

  21. Fourthly, in my view, the observations of Black CJ and French J in Ruddock (‘costs may be apportioned according to success or failure on particular distinct or severable issues’), and by Rares J in Probiotec to the effect that a court should consider the [inter]- relationship between the various claims made in the litigation, are important in the circumstances of the current proceedings.  With this in mind and having particular regard to the findings made at first instance (and the comments of Jagot J in the Federal Court), in my view, the following orders should be made.

  22. The First and Second Respondents should be jointly and severally liable for the costs orders that follow.

  23. Subject to what follows, those same Respondents should pay the Applicant’s costs of the proceedings at first instance, either as agreed or taxed.

  24. As already noted, in relation to all aspects pertaining to the default judgment against the Third Respondent, each party should pay their own costs.

  25. Having regard to the success of the Third Respondent in resisting all claims against it, and excluding any costs relating to the default judgment, the Applicant should pay one quarter, and the First and Second Respondents, should pay three quarters, of the Third Respondent’s costs, either as agreed or taxed.

  26. The Applicant should pay for its unsuccessful attempt to join


    Mr Martins as a party to the proceedings.  Given the nature of and time spent during the trial on the Application, I would expect those costs to be rather modest.

I certify that the preceding sixty-two (62) paragraphs are a true copy of the reasons for judgment of Neville FM

Date:  13 May 2011


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