Telstra Corporation Limited v Phone Directories Company Pty Ltd (No 3)

The Federal Court of Australia in Telstra Corporation Limited v Phone Directories Company Pty Ltd (No 3) [2014] FCA 949 addressed the issue of whether the publication of advertisements by the respondents constituted misleading or deceptive conduct in breach of the Trade Practices Act 1974 (Cth). The court also considered the timeline for remaining steps in the litigation, the recovery of wasted costs from a previous application, and the appropriateness of ordering gross sum costs before all substantive issues were resolved.

The court ruled that the publication of advertisements by the respondents was indeed misleading or deceptive conduct. However, the court dismissed Telstra's claims of misleading or deceptive conduct and passing off against the respondents. The court also found that the respondents' claim of unjustifiable threats of copyright infringement proceedings by Telstra failed. The respondents, however, succeeded in their claim that Telstra's conduct in publishing the advertisements constituted misleading or deceptive conduct.

Regarding the timeline, the court ordered that the remaining issues in the misleading advertisements cross-claim be referred to mediation by 17 October 2014, with a trial set for 13 April 2015. The court found that mediation should precede further steps to avoid unnecessary costs and delays.

The court also ruled that the respondents were entitled to recover their costs from Telstra, except for the wasted costs incurred in the respondents' earlier application for a gross sum costs order in respect of the copyright claim. The court held that these costs were wasted because the remaining issues in the proceeding had been determined, and there was no need to separate out the costs in the copyright claim from other costs. The court ordered the parties to make submissions on the quantification of the gross sum costs, with mediation to be conducted in November 2014 if practicable.

Finally, the court decided that it was appropriate to order the respondents' costs to be assessed on a gross sum basis and paid forthwith, despite the fact that quantum in the misleading advertisements cross-claim had yet to be decided. The court reasoned that the proceeding had been large and complex, and it had been on foot for over seven years. The court considered that the respondents should not be out of pocket for longer than necessary and that the circumstances justified a departure from the general rule that a taxation or assessment of costs should wait until the case was completely finalised.