Tu v Pakway Australia Pty Ltd

In the case of Tu v Pakway Australia Pty Ltd, the applicants sought an order for costs following a successful application for an interlocutory injunction. The applicants argued that the general rule of costs following the event should apply and that their costs should not be reduced by one-third under O 62 r 36A(1) of the Federal Court Rules 1979 (Cth). The central legal issues before the court were whether the general rule that costs follow the event should be applied, and if the costs should be reduced under the specified rule. The applicants contended that there were no special circumstances justifying a departure from the general rule, and that the reduction of costs by one-third was not warranted.

The court considered the discretionary nature of the power to make orders for costs, derived from s 43 of the Federal Court of Australia Act 1976 (Cth). It acknowledged that a successful litigant is ordinarily entitled to an award of costs, but this entitlement can be subject to the court’s discretion. The court referenced previous cases such as Ruddock v Vadarlis (No 2) to establish that costs may be refused or apportioned according to the conduct of the parties in the proceedings. It was noted that costs are typically not awarded if the successful party's conduct would render it unjust or unreasonable to do so. The court also highlighted that where a party has succeeded on only a portion of their claim, they may be required to bear the expense of litigating the unsuccessful portion. However, in this case, the applicants successfully argued that there were no grounds to depart from the general rule of costs following the event.

The court concluded that the applicants were entitled to an order for costs, and that there were no special circumstances justifying a reduction under O 62 r 36A(1) of the Federal Court Rules. Therefore, the applicants were awarded their costs of and incidental to the proceedings, except for the costs related to the interlocutory injunction application, which were to be borne by each party. The court also ordered that the costs should not be reduced by one-third as per the specified rule.

ORDERS:
1. The first and second respondents pay the applicants’ costs of and incidental to the proceedings, including all reserved costs except the costs reserved on the application for an interlocutory injunction, on a party and party basis to be taxed in default of agreement.
2. Each party bear his or its own costs of the application for an interlocutory injunction.
3. Costs not be reduced pursuant to O 62 r 36A(1) of the Federal Court Rules.